Pound Sterling is still dominated by the “Brexit Development Headlines” and the GBP is holding steadily over 1.3110 after the release of BoE interest rate. The BoE monetary Policy Committee decided not to change the UK interest rate and rate was set at 0.75% as it was before. Furthermore, the BoE also decided not to alter any kind of monetary policy.
Yet, the BoE showed larger concern over about the Brexit deal, as it said,
“Since the Committee’s previous meeting, there have been indications, most prominently in financial markets, of greater uncertainty about future developments in the [EU] withdrawal process”.
According to BoE regional staffs, the businesses were tightening their grip over the cost control policy and holding off the investments ahead of UK March 2019 exit. However, 40% EU investors believe that there is a certain chance that Brexit deal would hurt the sale.
However, there are more warming and welcoming news for GBP, as BoE forecasted that the economic growth of third quarter would be 0.5%, which was 0.4% in the last quarter
GBP-USD 5-minutes time frame
Issues waning about no-deal Brexit
As, there are important headlines about Brexit developments, the chances of “No-deal” Brexit is fading, though a few financial agencies are still warning the investors to stay in a “wait and see” mode.
A successful Brexit deal would eventually help both EU and UK economy, yet if there is no deal, the UK economy is going to suffer along with its GBP, which would likely to be followed by an increased inflation. Also, UK are not going to pay the GBP 39 billion “Divorce Bill”, it there is no successful deal.
For now, GBP is holding its ground over 1.3110 region, while preparing this report, at GMT. 18.00. There is also a chance of short-term break over the 1.3220 region. Yet, the recovery of April-September downfall could only be achieved without any hurdles, if there is a successful Brexit deal. Otherwise, the GBP buyers would have to depend on the stagnant dovish move of ECB and USD weaknesses.
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Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.