- BOE Minutes Reveal an Interest Rate Vote of 7-2 By the MPC Members.
- GBP/USD Surge After The BOE Minutes To Trade Above 1.6650
- Looking Ahead The July’s FOMC Minutes Will Take Center Stage.
Want to trade with proprietary strategies developed by FXCM? Find out how here.
The much anticipated Bank of England (BoE) Minutes for the month of August revealed that BOE policy makers were split on an interest rate hike. The interest rate vote (7-2) showed two MPC members (BOE’s Weale and McCafferty) were calling for a 25 basis-point rate hike in August justified by the strong economic growth in the UK. However, the majority were reluctant for a rate increase as they argue an early rise may leave the economy exposed to shocks such as putting pressure on indebted households and derail economic growth. Moreover, the majority remarked that the recent weaker-than-expected CPI prints and outlook from the UK did not justify a rate increase.
Ahead of the BOE Minutes, the British Pound fell as low as the critical 1.6600 level against the US Dollar. Immediately after the release, GBP/USD surged over 40 pips to trade above the psychologically significant 1.6650 level. Moreover, the UK 10-year Gilt yield rose 4 basis-points to 2.44 percent after the BOE Minutes. This suggest that traders are increasing their bets for the BOE to raise interest rate sooner-than-later. The emergence of MPC members siding with the more hawkish stance may be the catalyst for surge in GBP/USD says DailyFX Currency Strategist Ilya Spivak.
Looking ahead, July’s FOMC Minutes by the Federal Reserve will take center stage and is scheduled to be released at 18:00 GMT, later today. If the rhetoric from the FOMC minutes remain dovish, it may act to weigh on the greenback says DailyFX Currency Analyst David De Ferranti. For the remainder of the week, the key event risk is expected to come from China’s PMI data and Jackson Hole.
For those forex traders that endorse technical analysis, Ilya Spivak mentions near-term support rests at 1.6611 (23.6% Fib Exp.) and resistance at 1.6659 (14.6% Fib Exp.). He remains flat for now as he argues against entering short with prices trading in close proximity to support level and there is an absence of a defined bullish reversal signal. Meanwhile according to DailyFX Speculative Sentiment Index, the ratio of long to short positions in the GBP/USD stands at 1.76 as 64 percent of traders are long.
GBP/USD 5 Minute Chart
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
New to FX? START HERE!
Edward Hyon, DailyFX Research Team
Keep up to date on event risk with DailyFX Calendar
Forex FundamentalsAs the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
EconomicsOne particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
ForexBreaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
InvestingAccess to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
EconomicsSouth Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
Forex EducationPeer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
ForexHere is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
EntrepreneurshipA brief overview of the top apps that help forex traders with on time information, charts and more.
Investing BasicsVirtual currency is probably here to stay, but what about Bitcoin specifically? Does it have a first-to-market advantage? What are the risks involved?
Forex NewsWhen it comes to forex, some types of "fixes" are legal. But some really aren't.
- No results found.