British policymakers made no change in policy for another month. There was some speculation that the MPC would increase the Asset Purchase Facility. This didn’t happen now, and the pound manages to edge up on a mini relief rally.
Talks about an expansion of the QE program above 200 billion pounds already allocated to it have been making the rounds. In the recent decisions, only one member, Adam Posen, voted for this option. Perhaps in this meeting, additional members voted for it. We’ll know that in a couple of weeks.
Part of the expectations were built up by the British Chancellor of the Exchequer, George Osborne, who said that the government’s austerity “paves the way” for action by the central bank. Well, not now. It could take a few more months. In any case, there are more chances of easing than of tightening at the current situation.
GBP/USD is now challenging the round 1.60 line, after falling earlier to support at around 1.5910. If the 1.60 is broken, further resistance is found at 1.6110, followed by 1.62. Support is found at 1.5940, followed by 1.5910.
Update: 1.60 was broken and GBP/USD pierces forward, to 1.60 at the time of writing.
For more lines and events, see the British pound forecast.
In many previous rate decision, there were absolutely zero expectations and no results as well, turning this event into quite a minor one, and leaving the center stage for the MPC Meeting Minutes published later on.
The last shift in the minutes went to the dovish side: no member voted for a rate hike after many months were at least two out of nine members wanted a hike.
The situation in Britain isn’t too good.
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