- GBP/JPY bounces at 135.00 and returns above 136.00.
- Pound picks up after BoE’s decision.
- Brexit uncertainty remains weighing on GBP longs.
Sterling’s reversal from the 137.35 top on Wednesday has been contained at 135.00, and the pair appreciated on Thursday, following the release of the Bank of England’s monetary policy decision, to regain the 136.00 level
The sterling picks up after BoE’s decision
The sterling is appreciating across the board on Thursday despite the Bank of England’s move to ramp up its quantitative easing program by £150 billion to a total target to £895. The market has reacted positively to the decision as the new stimulus package has turned out to be smaller than the £200 billion advanced by some market reports.
The day the second national lockdown starts in the UK, the Bank has also reaffirmed its commitment to expand its bond-buying program in the future to offset the economic impact of the COVID-19 pandemic.
Furthermore, the upbeat market mood, triggered by the advantage of Democrat Joe Biden on the tight race for the White House, has increased negative pressure on safe-haven assets like the JPY, contributing to sterling’s recovery.
On the negative side, however, the standstill on the Brexit negotiations and comments from the UK and EU representatives reiterating the distances in some key issues are keeping GBP demand subdued.
Technical levels to watch
Share
