Search ForexCrunch

The pound  awaits the highly anticipated decision by the BOE on Super Thursday. They kept us waiting for three weeks and now they have no more excuses for making a big announcement. You can read this preview  or this one  for in-depth analysis.

Or, here are 5 options and potential GBP/USD scenarios for this big post-Brexit decision:

Update:  BOE cuts 25bp + 70 billion in total QE – GBP falls

  1. 25bp rate cut and nothing else: Priced in, GBP/USD rocks and rolls but basically remains in place.
  2. 50 billion more QE and nothing else: An almost OK substitute, but not enough: GBP/USD to rise in range, unlikely to break 1.35.
  3. Both a rate cut and QE: Not really priced in, a big package, GBP/USD falls in range, unlikely to fall under 1.30.
  4. Extreme rate cut to 0.10% or 0% and perhaps more QE: Low chances, GBP/USD falls out of bed under 1.30.
  5. No moves, only forward guidance: Low chances, unreliable boyfriend not priced in, GBP/USD shoots above 1.35.

What do you  think?

More notes:

  • Other moves such as the  Funding for  Lending (FLS) scheme  will be welcomed moves for the economy but should not have a big impact on the pound.
  • The best thing to do would be a  coordinated move with the new government. An infrastructure plan which is funded by BOE-funded  newly issued bonds would be the best thing to do, but perhaps  it’s too early.

Here is video preview.