The Pound has been caught in a central bank sandwich today. Incoming Bank of England governor Mark Carney was grilled by MPs this morning ahead of his appointment in June, and this afternoon ECB chief Mario Draghi was doing his very best to stop appreciation of the euro with his words alone.
Today’s move in the pound is a great example of how, in the current climate, the market’s perception of a central banker matters more than what they actually say.
Guest post by Alistair Cotton, senior analyst, Currencies Direct
Mr Carney remained vague on inflation and growth, but the dovish perception of him and the very fact he was on the wires led to a brisk sterling sell off first thing. However, at his monthly press conference this afternoon, Mr Draghi has singlehandedly dragged the sterling off its lows and higher against the euro by himself being vague about FX policy in the Eurozone. And as they say, perception is everything.
Further reading: GBP/USD weekly forecast.
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