Home GBP: King Pounds the Pound November 14 2012
Forex News Today: Daily Trading News

GBP: King Pounds the Pound November 14 2012

The Bank of England’s inflation report was quite dovish and also included a complaint about the strength of the pound. He also mentions that more QE could be on the way.

GBP/USD reacts to the news with a slide towards the 1.5780 levels. Update: cable already touches 1.5862.

Some points from the report (updated):

  • Near term growth forecast cut.
  • Q3 growth (+1%) was due to one time events – the Olympic Games.
  • Q4 might see another fall in output.
  • Inflation expected to be 1.8% in 2 years.
  • The MPC is open to more asset purchases – more QE.
  • Slow recovery unless the pound depreciates.
  • Unfavorable environment of higher inflation and lower growth.

Earlier, the UK reported a rise of 10K in jobless claims in October, higher than expected. The unemployment rate for September dropped to 7.8%, but this still might be an Olympic effect.

David Blanchflower, former MPC member, says that growth forecast is overly optimistic.

The inflation figures reported yesterday indeed showed a rise of inflation. For more on the pound, see the pound dollar forecast.

Yohay Elam

Yohay Elam

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 a 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.