Technical analysis and trading recommendations - https://fxpcm.com/en/fx/gbpusd-bank-england-kept-its-monetary-policy-unchanged-15072016
As already known, the Bank of England left its monetary policy in the UK yesterday unchanged. The interest rate has remained at 0.5%, asset purchase program was also maintained at 375 billion pounds. In its decision the Bank of England surprised the financial markets, it is expected that the Bank of England cut rates after the vote for access to the UK from the EU. In a subsequent statement, the Bank of England said that the majority of the members of the Monetary Policy Committee (MPC) of the Bank of England expects easing in August.
It will be interesting to hear in this regard the decision of the head of the Bank of England Governor Mark Carney, who is scheduled to speak today (12:00 GMT). Mark Carney, after a referendum in the UK, said that in the summer need some easing of monetary policy in the country. He also pointed out that this mitigation could happen at the next meeting of the bank. It turned out that the "summer" and "the next meeting" - does not mean in July. On the bank's decision to leave interest rates unchanged at the pound appreciated sharply on the currency market, especially against the yen and the US dollar, and also against the New Zealand dollar. The latter, in turn, actively yesterday declined after both the RBNZ was reported that the bank will present on July 21 a new assessment of the economic situation in New Zealand due to the changed financial conditions in the country because of the events in Europe in the background Brexit.
Strengthening the pair GBP / USD was nearly 200 points yesterday. The pair jumped 330 points decision to the level of opening of the trading day. But then the pair fell, closing yesterday's trading day near the 1.3340 mark, the message from the Bank of England that "most of the members of the committee expects easing policy in August."
With the opening of the trading day the pound continued to rally, but the beginning and at the opening of the European session, the pound and the GBP / USD pair is reduced.
Now, many economists expect that in August the Bank of England cut interest rates by 25 basis points, to 0.25%, as well as increase the quantitative easing program at 100 billion pounds to 475 billion pounds, although it is possible that in a few steps.
Expectations of easing monetary policy in August, the uncertainty of future prospects for the UK economy against the backdrop of Brexit can keep the pound from further strengthening.
It is highly probable that made yesterday a maximum near the 1.3480 mark may be local, and the GBP / USD pair will continue to decline towards the levels of 31 years ago marks near 1.2900, 1.2800