The MPC Meeting Minutes revealed that there’s still only one member, Andrew Sentance, who wants a rate hike. So, the rising inflation will continue to be disregarded. Without an upcoming rate hike, GBP/USD doesn’t have fuel to rise.
This sends GBP/USD down from 1.5330 to 1.5260. Andrew Sentance surprised with his vote last time, and created the impression that the rising inflation will force the BoE to raise the rates. He repeated this opinion in interviews that he gave in the past month. Nevertheless, Mervyn King, that disregarded rising inflation again and again, did it once again. Also the other members weren’t impressed.
British CPI is currently at an annual rate of 3.2%, above the government’s target range of 1-3% but already below the peak of 3.7% that it reached at the beginning of the year.
GBP/USD back to the range
The Pound broke out of a tight range last week, and made a move towards the all-important resistance line of 1.5520. It didn’t manage to end the week in these levels and fell back down below 1.5350, an important pivotal line.
Also now, 1.5350 caps the pair. Looking down, 1.5230 is minor line of support, and it’s followed by 1.5130 and then by 1.5050.
Earlier today, the Pound made a roller coaster move down from 1.52 to 1.5174 and back up all the way and even higher, in a time span of less than an hour.