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
EUR/USD
Mixed
Low
High
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
GBP/USD
Bearish
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Low
High
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
Bitcoin
Mixed
More View more
Real Time News
  • What are the truths and myths of #forex trading? Find out from @DailyFX analysts here: https://t.co/uF75VPzstr #FOMOintrading https://t.co/bDXG2dV3wG
  • The US Dollar technical outlook against the Euro, British Pound, Australian Dollar and New Zealand Dollar are discussed. Large wicks left signs of indecision, will reversals follow? $EURUSD $GBPUSD $AUDUSD $NZDUSD - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/12/15/US-Dollar-Technical-Outlook-EURUSD-GBPUSD-AUDUSD-NZDUSD.html?CHID=9&QPID=917702 https://t.co/dpuIppxo3F
  • What are some trading mistakes @nickcawley1 made during his career and what did he learn from them? Find out: https://t.co/y3cckNW22W https://t.co/vUQyVl6b0e
  • Growth linked currencies have gained as investors hope for progress on the trade front as well as stimulus from the Fed. The global economy however remains depressed and seems likely to remain so. Get your market update from @DavidCottleFX here: https://t.co/jt1HH9AHLM https://t.co/Yz65AMJYlm
  • RT @YuanTalks: #China temporarily suspend additional tariffs of either 10% or 5% on some #US goods scheduled to take effect on Dec 15, said…
  • The gold-silver ratio is simple. It is the number of silver ounces you would need to trade to receive one ounce of #gold at current market prices. Find out how you can use this in your trading strategy here:https://t.co/kh5DZvv5ib $XAUUSD https://t.co/eJGODpfTNc
  • How can traders avoid #FOMO in trading? Start by implementing a well-heeled plan taking only four hours per week. Get your insight from @JStanleyFX here: https://t.co/vwUShQPc27 https://t.co/DoVBd1l1oO
  • #Silver is a precious metal commodity that investors use as an inflation hedge and safe-haven asset. Find out what are some strategies and tips to trade silver here: https://t.co/k4tVcFuwxW #CommoditieswithDailyFX https://t.co/zXCSmH2HLX
  • Markets are trying to maintain a bullish tilt as a new week rolls around, a look ahead at the charts of the #Dow, #DAX, and #FTSE. Get your technical analysis on major world indices from @PaulRobinsonFX here: https://t.co/bYjRDvQsdM https://t.co/mbg0rUbv3K
  • Trade conflict is clearly awful for the broad world economy, but some countries are already benefiting from it. More stand to do so. Spotting them early could be profitable. Get your update on the #tradewar from @DavidCottleFX here: https://t.co/og0VAPAqwm https://t.co/xB8hYUj4OA
British Pound Soars to Near One-Month High on Quarterly Inflation Forecast

British Pound Soars to Near One-Month High on Quarterly Inflation Forecast

2016-11-03 13:35:00
Nick Cawley, Analyst
Share:

Talking Points

- Bank of England holds interest rates steady at record low 0.25%

- BOE says monetary policy could respond “in either direction to changes in the economic outlook”

- BOE raises 2017 growth and inflation forecasts.

The British Pound traded at a near one-month high of GBP/USD $1.2482 after Bank of England Governor Mark Carney and the Monetary Policy Committee kept the Bank Rate unchanged at 0.25%. Likewise, in a hawkish twist, the MPC said that interest rates could move in either direction depending on the economic outlook. But the hawkish hue to the latest Quarterly Inflation Forecast was most evident in its updated growth and inflation forecasts.

The BOE’s new set of growth and inflation outlooks both trumped previous forecasts. The economy is seen expanding by +2.2% in 2016 from a prior expectation of +2%, and by +1.4% in 2017, up from the previous forecast of +0.8%. Governor Carney said that the economy this year was growing faster than expected this year “reflecting the resilience in particular of indicators of household spending and sentiment.”

Chart 1: GBP/USD 5-minute Chart (November 2 to 3 Intraday)

British Pound Soars to Near One-Month High on Quarterly Inflation Forecast

The weak British Pound is seen as the driving force behind renewed forcasts on UK inflation with the central bank now seeing inflation rising above its target of +2% early next year and hitting +2.7% by the end of 2017. The Bank of England said that while it will accept an inflation overshoot in the short-term, “there are limits to the extent to which above-target inflation can be tolerated.” To this extent, markets are quickly adjusting to the reality that the BOE will not be easing policy again anytime further, fuelling the rebound in the Sterling.

Today’s BOE meeting followed the news earlier in the day that the UK government cannot trigger Article 50 Brexit negotiations without Parliamentary approval. The UK government has said that it will appeal the High Court ruling and the Supreme Court has set aside space for a hearing on 7-8 December.

--- Written by Nick Cawley, DailyFX Research

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

DISCLOSURES

News & Analysis at your fingertips.