GBP/USD edges lower to near 1.3100 on potential for further BoE rate cuts
GBP/USD edges lower around 1.3120 during Asian hours on Friday, after rising 1% over the past two sessions. The pair depreciates as the Pound Sterling (GBP) weakens following the Bank of England’s (BoE) dovish hold in November.
The BoE held interest rates steady at 4% on Thursday, as expected, but the vote indicated a dovish tilt, with four of the nine Monetary Policy Committee (MPC) members favoring a 25-basis-point cut to 3.75%. Read more…
GBP/USD extends much-needed recovery as Cable recovers 1.31
GBP/USD climbed on Thursday, driven into the high side by over-extended bearish price action that has plagued the pair, as well as a surprisingly close Bank of England (BoE) vote on interest rate moves that gave investors hope that the BoE might be moving to support the UK’s flagging economy despite still-high inflation metrics.
The BoE’s Monetary Policy Committee (MPC) voted to keep interest rates on hold this week, a move that surprised functionally nobody within the investment community. What did come as a surprise was the distance (or lack thereof) between MPC voters voting to hold or cut interest rates. The BoE’s interest rate setting guild voted five-to-four to keep interest rates on hold until the MPC’s next interest rate decision, a notably tighter gap between holders and cutters than initially expected. Read more…
GBP/USD rebounds after BoE’s dovish hold but remains below 1.31
GBP/USD recovers some ground but trades off daily highs as the Bank of England (BoE) held rates unchanged on Thursday, on a ‘dovish’ hold as the vote split hints that the December meeting is open. The pair trades at 1.3080, up 0.26%. The BoE kept the Bank Rate at 4% on a 5-4 vote split on Thursday. The four dissenters who wanted a 25-basis-point rate cut were: Dhingra, Taylor, Ramsden and, surprisingly, Breeden. BoE Governor Andrew Bailey welcomed the September inflation figure, which held steady, but warned that it was just one series and that further data is needed.
At the press conference, Bailey focused on inflation, saying that he doesn’t know where neutral rates would be and that the current policy is still restrictive. The BoE’s Monetary Policy Committee (MPC) believes that inflation has peaked. Bailey added that, “We still think rates are on a gradual path downwards, but we need to be sure that inflation is on track to return to our 2% target before we cut them again.” Read more…
