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No New Votes for a Rate Hike – Pound Falls

The latest meeting minutes of the MPC have shown that no new members voted for raising the interest rate. GBP/USD lost the gains it made beforehand and is now at support. Update on this volatile pair.

The MPC meeting minutes have shown the same result as last time – 6:3. Six members, including BOE governor Mervyn King voted for no change in Britain’s low interest rate – 0.50%. 3 members voted for raising it: the veteran hawk Andrew Sentance voted again for a hike of 0.50%, while Martin Weale and internal member Spencer Dale voted for raising the Official Bank Rate by 0.25%.

And as usual, the veteran dove Adam Posen took another direction, voting for an expansion of the quantitative easing program by an additional 50 billion pounds, in order to aid the weak economy.

So, without any changes, the rate hike in Britain won’t come earlier than previously thought.

GBP/USD Falls to Support

The pound began descending before the release and continued to do so afterwards. Cable fell from 1.6380 to 1.63. Serious support is found at the area of 1.6280 – 1.63. This region worked as very tough resistance just until yesterday.

Yesterday, GBP/USD rose after the release of the fresh inflation figures: CPI rose to an annual rate of 4.4%, and also Core CPI and RPI exceeded expectations. These gains are lost now.

A breach of 1.6280 will open the road for falls up to 1.6110, followed by 1.60. A recovery will send the pair to challenge the 1.64 area, followed by 1.6450.

For more technical levels and events, see the GBP/USD Forecast.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.