GBP Spikes on BoE Shift
GBP is the strongest currency on the day thanks to a surprise shift inside the interest rate votes of the Bank of England. The 9-member Monetary Policy Committee shifted its vote of holding rates unchanged to 6-3 from 7-2, after chief economist Andy Haldane moved towards a rate hike to join hawks Ian McCafferty and Michael Saunders. Odds of an August rate hike shot up to 68% from 49% yesterday. GBPUSD shot up 100 pips to 1.3210. Why did Haldane change his mind?
After declining 9% over the past two months, GBPUSD may now be deemed too low according to the assessment of the BoE. The central bank may be reverting to jawboning the currency with the aim of contain inflation via influencing the probabilities of rate hike (without actually raising rates). So, instead of running the risk of damaging the economy via raising rates during Brexit-filled uncertainty, the BoE will aim at capping inflation via supporting the currency indirectly. Recall, UK inflation above the 2.0% target at 2.4% and UK PMIs find ongoing support atop the expansion territory. Meanwhile, here is the monthly GBPUSD chart.
It's getting real with yields
by Ashraf Laidi | Aug 2, 2021 18:10
ندوة مساء الثلاثاء مع أشرف العايدي
by Ashraf Laidi | Aug 2, 2021 16:44
Dollar Dips, Complex PCE Next
by Adam Button | Jul 30, 2021 13:05
We're a ways away
by Adam Button | Jul 29, 2021 12:54
New Premium Trade & Pressure Lifts on the Fed
by Adam Button | Jul 28, 2021 18:40