Search ForexCrunch

   “¢   BoE decides to leave interest rates/asset purchase facility unchanged.
   “¢   BoE says that the ongoing monetary policy tightening is appropriate.  

The GBP/USD pair quickly reversed a mid-European session dip to mid-1.2800s and spiked to fresh one-week tops, beyond the 1.2900 handle post-BoE.

The latest Brexit optimism faded after UK officials were quoted saying that the report by the Times of London on a breakthrough on financial services is “unsubstantiated”, which prompted some selling around the British Pound during the mid-European session.  

Adding to this, comments by Senior EU Negotiator Sabine Weyand cast doubt on hopes of a Brexit deal being reached within three weeks, i.e. by 21 November, and exerted some additional downward pressure.  

With investors looking past incoming Brexit headlines, the pair caught some fresh bids after the Bank of England’s MPC, as was widely expected, voted unanimously to leave interest rates and asset purchase facility unchanged at 0.75% and £435 billion respectively.

Meanwhile, the accompanying monetary policy  meeting minutes portrayed a hawkish outlook on the economic growth and said that the ongoing tightening of monetary policy appropriate if the economy grows as forecast.

Next in focus will be the BoE Governor Mark Carney’s post-meeting press conference, which along with any fresh Brexit-related news/developments will play an important role in influencing the near-term sentiment surrounding the British Pound.

Technical levels to watch

Any further up-move beyond 1.2935-40 immediate hurdle might now assist the pair to aim towards reclaiming the key 1.30 psychological mark. On the flip side, mid-1.2800s now becomes an immediate support to defend, which if broken might trigger some additional weakness further towards the 1.2800 handle.