The Bank of England’s Monetary Policy Committee left the interest rate and the QE program unchanged, as expected.
GBP/USD traded around 1.5550 before the publication and is now rising gently to 1.5565. Some feared that the deteriorating conditions would push the BOE to action. However, the ongoing Olympic Games and the action last time probably triggered some “wait and see” policy.
The British economy isn’t doing too good, to say the least. Recent GDP figures were terrible: a third consecutive contraction, and this time, the economy squeezed by 0.7% – rapid negative growth.
Last month, the BOE expanded the Asset Purchase Facility by 50 billion pounds to 375 billion. The decision was supported by 7 out of 9 members.
Now the stage is set for the big event: the ECB rate decision. Hopes are elevated after Draghi vowed to save the euro. Here are 8 options for Draghi.
Yesterday, the Federal Reserve refrained from action, and the reaction was a weaker dollar. However, some thought that the worries expressed in the statement indicate coming action in the next meeting.
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