Pound in a whirl as BOE cuts rates by 0.5%
Wednesday 11 March 2020
Carney & Co were up early this morning to land a 0.5% base rate cut along with other measures in a Coronavirus pre-emptive strike. A surprise ? Not entirely. Carney had made it clear that some action might be needed and that they wouldn't hesitate to move but the timing of it will have caught a few people out with the latest GDP data out at 09.30 GMT then the much-touted fiscal boost UK Budget being delivered at 11.00 GMT.
Carney is due to hold a press conference at 09.00 GMT so I will publish other pairs separately.
GBPUSD fell sharply to 1.2825 post-BOE rate cut and I duly took some profit on existing shorts but the pair was equally quick to bounce back to 1.2944 as we wait on Carney. EURGBP has rallied to post 0.8848 (GBPEUR down to 1.1300)in the BOE aftermath before also falling back quickly to 0.8740 (GBPEUR up to 1.1442). Markets will be casting an eye on tomorrow's ECB announcement where they are expected to take some action too. GBPJPY plummeted to 134.00 post-BOE but back up to 136.20 before capping as we wait on the presser. BOE and Budget action are not the only games in town for this pair of course as market risk remains fragile.
I stay poised to sell GBP rallies and buy back in the dips as ever. I don't see fiscal or monetary policy measures being able to dig the Service-led UK economy out of this latest hole.
Other pairs to follow shortly.
Fickle Forex markets ever prevailing so be ready to jump on moves with your entry/exit levels and orders as always. Caution advised as ever if you're not sure.
Lots going on right now, and the foreseeable future, so don't forget that I offer 1-2-1 mentoring if there's areas of trading these volatile markets or how to make best use of the order boards and expiries, that you might need some further help with.
Have a good day one and all. Let's be careful out there as ever.
Interbank rates: 08.40 GMT
GBPZAR 20.7386 (Lows of 20.4720 post-BOE)