Carney giveth, Carney taketh away – GBP/USD slides from

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The hawkish meeting minutes from the BOE sent the pound soaring. They hinted at a rate hike in “the coming months”. Sterling extended its gains after a member of the BOE reiterated the big hint of a hike in November.

But Carney is Carney. The Governor of the BOE easily changes his mind or at least sends a more nuanced message. In a speech at the IMF, Carney did repeat that interest rates may need to rise, but this is due to other central banks’ own hikes.

Being dragged along is not exactly a hawkish message. The pound dropped, with cable slipping under 1.35.

What about rising inflation in the UK? What about a credit boom? There are good reasons to raise rates in Britain. There are also worries that Brexit could hurt the economy. In any case, this specific speech from the Governor looked at global factors rather than local ones.

In November, the Bank of England has its “Super Thursday”: it releases the Quarterly Inflation Report in addition to the rate decision. The odds still favor a rate hike. Nevertheless, it could be both the beginning and the end of the rate hike cycle. Or in other words: undoing the post-Brexit rate cut. And that’s it.

Will a “one and done” send the pound back down under 1.30? This cannot be ruled out.

At the moment, support awaits only at 1.3370. Resistance is at the highs of 1.3615. There is a lot of room in the middle.

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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 the 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.

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