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.

Free Trading Guides
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
More View more

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Silver: 0.42% Gold: 0.41% Oil - US Crude: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/qdRVEtYobI
  • I am genuinely curious how Saudi Arabia got production back up so quickly. Makes it seem like they had massive spare capacity that was idled or they just ran a big garden hose around the portion of the plants that was destroyed...
  • US and Chinese 'deputies' are due to restart negotiations today. Meanwhile, the cumulative pain of tariffs continues to show through. FedEx earnings are an example. Here is $FDX overlaid with the Yuan-Dollar exchange rate (green) https://t.co/WZtuuUkhE7
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.67%, while traders in France 40 are at opposite extremes with 85.67%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/T417OE2Mmy
  • $NZDUSD: A close below the low end of the zone could send NZD/USD towards 0.6136. Get your #technicalanalysis from @malkudsi here: https://t.co/i2YMDFJkRp https://t.co/TuvWNJZtgg
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: US 500: 0.22% Wall Street: 0.13% Germany 30: -0.04% France 40: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/aDo9IwMads
  • Re-upping this. https://t.co/SUv8Lzbhxu
  • $USDCAD: The broader focus remains on a break of the 1.3155- 1.3355 zone for guidance on our near-term directional bias. Get your technical analysis from @MBForex here: https://t.co/q1UJdW49AW https://t.co/OR0Gl1YPIn
  • Precious Metals Update: #Gold 1,499.19 (+0.35%), #Aluminum 1,785.50 (-0.36%), and #Copper 5,814.00 (-0.12%). [delayed]
  • RT @BobOnMarkets: In other words, juts like back before forward guidance led markets to price out risk premiums and over-inflate asset pric…
British Pound Slightly Lower on Dovish BoE, Markets not Surprised

British Pound Slightly Lower on Dovish BoE, Markets not Surprised

2016-02-04 12:47:00
Oded Shimoni, Junior Currency Analyst

Talking Points:

- BOE keeps rates unchanged at 0.50% by a unanimous decision (9-0).

- Inflation projected at 1.2% at Q1 2017, down from 1.5%.

- GBP-crosses traded sideways to lower around the announcement.

Find Key Turning Points for the British Pound with DailyFX SSI

The British Pound traded slightly lower versus other major currencies (at the time this report was written) after today’s BoE rate decision saw interest rates unchanged at 0.50%, as was expected by economists. The Monetary Policy Committee (MPC) voted unanimously 9-0 to maintain the Bank rate at 0.50%. Ian McCafferty, who was the only member opting for a rate hike since August 2015, dropped his vote for a rate increase. The MPC also voted unanimously to maintain QE bond purchase at a total of £375b billion.

As the decision was highly expected, the focus turned to the meeting’s vote count followed by the minutes and the publication of the quarterly Inflation Report. The fact that McCafferty dropped his vote for a rate increase seems to paint a more dovish picture on the BoE’s outlook going forward. Looking into the Minutes statement, the MPC emphasized effect of the slide in oil prices, volatility in global equities and commodities, and China’s slowdown. The MPC commented that risks to the central projection are skewed a little to the downside in the near term, reflecting the possibility of greater persistence of low inflation.

Coming into today, the UK CPI readings, which was 0.2% in December, has been far below from meeting the central bank’s inflation target of 2%. With the slide in oil prices from the start of the year, the bank previously commented that the 2016’s forecast will probably be cut again. The quarterly Inflation Report said the BoE see inflation, at 1.2% in Q1 2017, down from a projection of 1.5% from November’s Inflation Report. The Central bank sees inflation at 2.05% in two years time, slightly above target.

As was mentioned today by DailyFX Currency Strategist Ilya Spivak, the markets have positioned for a dovish outcome; Overnight index swaps (OIS) has dropped to the lowest level since May 2013, with the baseline view of a 64% probability that rates remain unchanged and a 36% probability of a 25 bps cut by February 2017. Up until very recently the central bank was considered likely to raise rates in 2016. Is seems the markets perception was largely in line with the meetings outcome, so the British Pound saw only a slight negative reaction.

Chart 1: GBP/USD 5-minute Chart (Intraday): February 4, 2016

British Pound Slightly Lower on Dovish BoE, Markets not Surprised

Missed today's Bank of England meeting? Watch the webinar archive of today's live event coverage with Currency Strategist Christopher Vecchio.

-- Written by Oded Shimoni, DailyFX Research

To contact Oded, email him at instructor@dailyfx.com

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


News & Analysis at your fingertips.