FXStreet (Edinburgh) - After briefly hitting highs beyond 1.6860, the GBP/USD is now returning to the pre-BoE levels around 1.6845/40.

GBP/USD muted on BoE

Broadly in line with market expectations, the Bank of England left both the refi rate and the asset purchase facility intact at 0.5% and £375 billion, respectively. Spot is now netting a flat move after fading the spike beyond 1.6860 in the wake of the release. “The growth story remains very positive and the economy continues to add jobs in significant numbers, but with wages barely growing and the degree of slack in the labour market still looking uncertain the BoE is content to leave policy unchanged… Given we don’t expect any significant loss of momentum for the UK economy over the rest of the year we favour a November rate hike from the BoE with very slow and steady additional tightening of perhaps 25bp per quarter thereafter”, assessed James Knightley, Analyst at ING Bank.

GBP/USD levels to watch

At the moment the pair is retreating 0.03% at 1.6847 and a breach of 1.6821 (low Aug.6) would expose 1.6812 (low Aug.1) and finally 1.6811 (76.4% of 1.6693-1.7192). On the upside, the initial hurdle lines up at 1.6872 (high Aug.7) followed by 1.6888 (high Aug.6) and then 1.6890 (high Aug.5).

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