The GBP/USD pair is trading a little bit downwards on Friday; investors aren’t in a hurry to compensate yesterday’s sales.
The British Pound is falling against the USD on Friday. The current quote for the instrument is 1.3053
It’ quite difficult for the British Pound to get stabilized after yesterday’s events. The Bank of England raised the key interest rate, thus providing many questions without any answers and giving many causes for reflection. For instance, it’s pretty obvious that the BoE is following in the footsteps of the US Federal Reserve. i.e, there may be quite a long interval between two rate hikes, possibly a year on average. And if the British regulator is planning to raise the rate twice in 2018, it is likely to happen by the end of the third quarter. If circumstances allow, of course.
Ben Broadbent, the Deputy Governor for Monetary Policy of the Bank of England, commented on the benchmark rate increase today. In his opinion, the hike was moderate, but in the future it would be better to stick to the same value of basis points when raising the rate in order to keep the regulator’s monetary policy reasonable. Broadbent also thinks that it’s very essential to monitor how the economy responds to the hike: he already sees the signs decline in consumption and investments because of the Brexit strategy. Tightening the monetary policy may only make it worse.
The Bank of England will monitor the inflation and the price dynamics. If the CPI rises in the first quarter of 2018, the regulator will have to increase the rate quicker. And it looks like this is exactly what frightens the Pound investors.
RoboForex Analytical Department