GBP Jumps As BoE Keeps Rates On Hold, Cuts Outlook
Fiona Cincotta January 30, 2020 9:04 AM
A more haawkish vote split than expected sends GBPUSD to $1.31
The Bank of England voted to keep interest rates on hold ay 0.75%. The MPC vote split was 7 – 2; a more hawkish vote split than what markets were expecting sending the pound shooting higher.
- 2020 GDP revised to 0.8%, down from 1.2%.
- 2021 GDP revised lower to 1.4% down from 1.8%.
Given that the market was pricing in a 50% chance of a rate cut, volatility was expected either way. However the hawkish vote split and broadly upbeat sounding BoE lifted sterling.Prior to the announcement GBPUSD was flat around $1.3024. The pair surged to $1.3108 and is currently finding support around $1.31.
Traders will now look ahead to Brexit tomorrow. This is priced in, so no big swings are expected. However, it will refocus attention onto the complex trade negotiations ahead which could pressurise the pound.
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