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
Bullish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
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
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • Trump says he will announce action on China before the week is over - BBG
  • Alright, so a breakout higher then in my #WallStreet index despite negative RSI divergence. This may have opened the door to revisiting peaks in average US stock prices from early March. Rising support from mid-May seems to be guiding the index higher (pink line) https://t.co/2dbegpLr7v
  • BOC's Poloz: - Policy from fiscal and monetary side set base for economic recovery - Uncertainty around virus remains -BBG
  • 🇰🇷 Business Confidence Actual: 49 Previous: 52 https://www.dailyfx.com/economic-calendar#2020-05-26
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.69% 🇳🇿NZD: 1.60% 🇨🇦CAD: 1.50% 🇪🇺EUR: 0.78% 🇨🇭CHF: 0.65% 🇯🇵JPY: 0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/QHpL43u1ca
  • archive of today's webinar ready to go https://t.co/dCPU3X7BvY
  • Trump says virus vaccines and remedies are going to be here 'very shortly' - BBG
  • Heads Up:🇰🇷 Business Confidence due at 21:00 GMT (15min) Previous: 52 https://www.dailyfx.com/economic-calendar#2020-05-26
  • Heads Up:🇨🇦 BoC Gov Poloz Speech due at 21:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-05-26
  • EUR/USD has rallied the best part of one big figure so far today and nears important resistance around the 1.1000/1.1020 area. Get your $EURUSD technical analysis from @nickcawley1 here: https://t.co/dJ1UzJSqHR https://t.co/1nHWYmdbIH
British Pound Drops as BoE Remains Calm on UK Inflation Outlook

British Pound Drops as BoE Remains Calm on UK Inflation Outlook

2017-02-02 14:00:00
Nick Cawley, Strategist
Share:

Talking Points

- BoE remains vigilant but calm on any inflation overshoot although some members raised concerns

- Big upward revision in UK 2017 GDP growth to 2% from 1.4% three months ago

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for next week on the DailyFX Webinar Calendar.

Bank of England governor Mark Carney left all UK monetary policy measures unchanged Thursday, but upgraded growth projections for the next three years. And while cost price pressures are still a concern – the MPC’s tolerance for above target inflation is ‘limited’ – the Governor actually downgraded the central bank’s forecast for 2017 inflation to 2.7% from 2.8% in the last Inflation Report in November. The minutes also reiterated that monetary policy could still be loosened or tightened, given the uncertain economic outlook with Brexit negotiations looming on the horizon.

The BoE upgraded 2017 GDP growth to 2% from November’s 1.4% and August’s 0.8%, and nudged both 2018 and 2019 growth 0.1% higher to 1.6% and 1.75% respectively.

The central bank downgraded 2017 inflation expectations to 2.7% from 2.8% and left 2018 expectations unchanged at 2.6%. The report says that the recent 3% rise in Sterling and higher gilt yields has tempered price pressures for the time being.

In his press conference, Governor Carney also noted that ongoing Brexit uncertainties are having a material effect on investment decisions and that the true effects of the UK leaving the EU will not be felt until after the central bank’s projection periods.

GBPUSD fell back below 1.26000 on Carney’s comments but could draw short-term support from the better-than-expected GDP forecasts. The sharp upgrade to 2.0% today is in stark contrast to the BoE’s projections of 0.8% in the August Inflation Report and should feed through and underpin Sterling, helping to push imported inflation even lower.

Chart: GBPUSD 5-Minute Timeframe (January 24-February 2, 2017)

British Pound Drops as BoE Remains Calm on UK Inflation Outlook

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Don't trade FX but want to learn more? Read the DailyFX Trading Guides

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

DISCLOSURES

News & Analysis at your fingertips.