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Pound pump closed? Carney sees no case for more QE

The governor of Bank of England gave an interview to the Yorkshire Post and made a very clear statement about more quantitative easing: “But my personal view is, given the recovery has strengthened and broadened, I don’t see a case for quantitative easing and I have not supported it”

GBP/USD reacted with a swing above 1.6131 before sliding, and EUR/GBP dropped to 0.8360, with GBP/EUR getting close to 1.20 once again. The pound retreated after the initial swing, but Carney’s words could echo.

The place and time for such a statement were somewhat surprising: it appeared in a not-so-major newspaper interview and was made public very early in the UK, before markets opened there. The financial services sector is concentrated in London, not in Leeds. The headline of the interview focused on the local economy and not the British one.

The Bank of England’s “Asset Purchase Facility” program’s size is 375 billion pounds. Just before Carney assumed his position as BOE governor in July 2013, there were quite a few members that did vote for more, including former governor Mervyn King.

Since then, the MPC voted unanimously against more QE, and now its clear that with the recovery, and even with its bumps, the head of the central bank is against further pumping of pounds.

With less pounds in circulation, the currency is worth more.

Resistance for cable appears at 1.6170, with the 1.63 level working as strong resistance as well. For more, see the British pound 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.