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GBP rallies as BoE minutes prove less dovish than expected – Scotiabank

FXStreet (Barcelona) - FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes GBP trading stronger into the NA open, having benefited from less dovish than expected BoE minutes.

Key Quotes

“GBP is stronger into the NA open, having benefited from less dovish than expected BoE minutes, including two members who were in favour of an immediate hike in the Bank Rate, as they were content to look through the disinflationary pressure from GBP and oil prices and what the minutes note as a ‘material spread of views on the balance of risks”.”

“Commenting on inflation, the minutes suggest that CPI had come lower due to global food and energy prices, the change in GBP, etc; but that it might also signal that underlying inflationary pressures were weaker and might persist. The BoE seemed to discount the potential that exchange rate pass through was stronger than anticipated.”

“Accordingly GBP is off its lows, struggling to reverse its strong and powerful downtrend.”

“GBPUSD short-term technicals: bearish—most studies continue to warn of downside risk, with support at the recent low of 1.5590 and resistance at the close on November 12th of 1.5779. For near-term traders, the risks continue to be weighted to the downside.”

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