The minutes for the August 6-7 BoE monetary policy meeting revealed that there were 2 votes to raise the official bank rate by 25 basis points. This can be considered hawkish because it is the first time in 3 years that there was no consensus. The market put on some GBP-strength after the release of the minutes. Let’s take a look at the GBP/USD, GBP/JPY and EUR/GBP to assess the reaction.
The GBP looked bullish during the 8/20 session especially after the BoE mintues showed 2 votes for a rate hike during the August meeting. GBP/USD however does not look like it is able to strengthen with such a strong and persistent downtrend developing. GBP/JPY does look like it wants to consolidate after a recent downtrend, and maybe even revive the prevailing bullsih outlook that has been intact since 2012. EUR/GBP looks like it has formed a price top after 3 months of consolidation/correction. It might be ready for bearish continuation, but a couple of signals might be needed before we can be confident of the bearish outlook.
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