“¢ BoE lowers its inflation forecast and disappoints GBP bulls.
“¢ The USD gains some traction amid positive US bond yields.
“¢ Traders now start repositioning for Friday’s US jobs report.
The GBP/USD pair extended the post-BoE modest intraday pullback and is currently placed at the lower end of its daily trading range, around the 1.3030-25 region.
The British Pound initially got a minor lift after the UK central bank signalled that more than one hike will be needed to keep inflation in check and also upgraded its economic growth outlook for 2019, 2020, 2021, albeit quickly changed course as market realized that the BoE also lowered its inflation forecasts for 2019 and 2020.
Market participants also seemed slightly disappointed by the fact that the decision to leave interest rates unchanged was unanimous as against some analysts’ expectation that at least one policymaker may back an immediate rate hike. This coupled with the big caveat that Brexit transition will be smooth failed to give today’s decision a hawkish touch and exerted some downward pressure on the Sterling.
Meanwhile, the latest leg of a downtick over the past hour or so could further be attributed to a modest US Dollar uptick, which picked up some pace during the early North-American session on the back of not so dovish FOMC statement and a mildly positive US Treasury bond yields.
With the key central bank risks out of the way, it would now be interesting to see if the pair is able to attract any fresh buying interest at lower levels or the current pullback marks the end of the recent positive momentum as traders start positioning for Friday’s keenly watched US monthly jobs report (NFP).
Technical levels to watch
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