Never miss a story from Christopher Vecchio

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Christopher Vecchio

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Talking Points:

- GBP picks up losses from last several days on BoE announcement.

- EURGBP, GBPCHF offer clearest flag opportunities.

- See the DailyFX Economic Calendar for Thursday, June 26, 2014.

It's been a busy week for Bank of England Governor Mark Carney, first telling us two days ago that his Mansion House speech, widely perceived as rather hawkish, shouldn't be viewed in that light. Whereas the commentary from Governor Carney earlier this week walked back expectations of tighter monetary policy, it appears the commentary was merely a distraction for the measures presented to.

Describing Governor Carney's commentary earlier this week as 'misdirected' seems harsh, but today's actions per the Financial Stability Report may help clear the haze. The BoE is evidently concerned about the pace of housing price gains, and in order to stamp out excessive speculation, the central bank is curbing borrowers' capacity to take on leverage.

Considering that the measures taken will only impact a very small portion of house purchasers in the UK, these are only the first small steps in the lead up to the BoE's first interest rate hike - which apparently is too blunt of a tool.

Rather than reducing incentive to borrow excessively across the board, the BoE is targeting the top of the pyramid. In all likelihood, the measures today will be only mildly effective if at all, and additional efforts to tweak BoE policy in a more hawkish light are just beginning.

With the ECB and SNB walking hand-in-hand down the path of ultra-loose monetary policy - be it by negative deposit rates or a currency pegged to another whose central bank is experimenting with negative rates - there is a definitive divergence from the BoE. Watch the above video for a look at the patterns unfolding in EURGBP and GBPCHF (as well as GBPUSD) to see how to take advantage of potentially bullish GBP opportunities over the coming days.

Read more: Carney Walks Back Hawkish Tone Setting Up ST GBP/USD Selling

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form