News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
Wall Street
More View more
Real Time News
  • RT @FxWestwater: Australian Dollar Outlook: $AUDUSD Unfazed by Falling Westpac Confidence Link:…
  • Japanese Yen Price Analysis: AUD/JPY, EUR/JPY Poised to Gain Ground - $JPY $AUDJPY $EURJPY
  • Heads Up:🇮🇩 Business Confidence (Q4) due at 04:00 GMT (15min)
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.77% Silver: 0.67% Gold: 0.41% View the performance of all markets via
  • A Symmetrical Triangle and long-term trendline resistance provide key levels to watch for NZD/CHF and CAD/CHF. Get your market update from @FxWestwater here:
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.31% 🇨🇦CAD: 0.17% 🇬🇧GBP: 0.16% 🇪🇺EUR: 0.14% 🇳🇿NZD: 0.13% 🇨🇭CHF: 0.12% View the performance of all markets via
  • The #HSI looks set to re-challenge the 28,970 resistance. Will it succeed and attempt 30,000 mark today?
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in EUR/JPY are at opposite extremes with 64.29%. See the summary chart below and full details and charts on DailyFX:
  • Japanese Chief Cabinet Secretary Kato: - Vaccine schedule can't be fixed before approval - Tokyo area still facing severe Covid situation - BBG $USDJPY
  • The British Pound may continue gaining ground against its haven-associated counterparts in the near term. However, the currency may give up gained ground against the New Zealand Dollar.Get your $GBP market update from @DanielGMoss here:
BoE Links Interest Rate to Unemployment, But Pound Rallies on Inflation "Knockout"

BoE Links Interest Rate to Unemployment, But Pound Rallies on Inflation "Knockout"

Benjamin Spier, Technical Strategist

THE TAKEAWAY: BoE links interest rate to unemployment -> BoE attaches inflation clause to unemployment link -> Pound rallies on limits to inflation flexibility

Want to trade with proprietary strategies developed by FXCM? Find out how here.

Although Governor Carney took over the reins at the Bank of England following a term at the Bank of Canada, it seems to be a Fed style of monetary policy that the central banker has brought across the Atlantic Ocean.

The Bank of England announced today in its quarterly inflation report that it will only again raise interest rates after the unemployment rate has fallen back to 7%. However, the BoE clarified that the 7% unemployment threshold does not mean that rates will automatically be raised should joblessness fall to that level, rather that is where the BoE will once again consider raising interest rates.

The Pound initially declined about 90 pips against the US Dollar following the announcement of the link of monetary policy to unemployment. However, those gains were soon erased, and Cable rose an additional 100 points, on BoE comments about inflation flexibility.

While BoE members have previously mentioned inflation flexibility, the BoE finally applied limitations to that flexibility in today’s report. The inflation report said that if inflation remains above 2.5% in another 18-24 months, then the unemployment condition to raising interest rates will be “knocked out”. Meaning, if inflation remains above 2.5% in another 2-years, the BoE may raise interest rates no matter what the unemployment. The Bank of England predicts that inflation will remain around 2.9% in the near term, but fall closer to its 2% target over the next two years.

The ILO most recently announced the unemployment rate for the three months ending in May at 7.8%, and three-month unemployment was last seen below 7% in February of 2009. Furthermore, the BoE forecasted that unemployment will remain above 7% until at least the third quarter of 2016. Therefore, the BoE is expecting to leave the interest rate at the current record low for at least three years, assuming inflation falls according to the central bank’s expectations. Regarding the possibly more immediate asset purchase target, Carney said the BoE is ready for more bond purchases if necessary.

Regarding economic recovery, Governor Carney said although there is a recovery taking place, it is the slowest recovery in the UK’s history.

Cable has reached a new monthly high at 1.5442 following the inflation report and Carney press conference. GBP/USD may next see resistance by the key 1.5500 level, and support may be provided by a broken resistance line around 1.5280.

New to Forex? Watch this video

GBPUSD Daily: August 7, 2013

Chart created by Benjamin Spier using Marketscope 2.0

-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to .

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.