The GBP/USD pair continues weakening on Thursday; April’s lows are very close.
On Thursday, the British Pound is back to its normal movement as it is falling against the US Dollar. The current quote for the pair is 1.4126.
Today’s meeting of the BoE was quite neutral. It wouldn’t be wise to expect the regulator to make capital markets even more nervous before the referendum. The interest rate remained at 0.50% and the decision to keep the rate was unanimous.
In the comments, the Bank of England once again mentioned the risks of the forthcoming referendum: if the British people chooses to exit the European Union, the Pound may fall fast and significantly. The referendum itself is considered a high risk for the GBP assets and investments into the country’s economy.
It’s interesting that the Bank of England, which usually rather “cool-headed”, gave so much attention to the referendum, talking about risks of unemployment growth in case the United Kingdom exits the EU, and consequences for the worldwide economic system. It looks more and more like moral pressure on the population – “just look where you’re heading and how much you’re going to pay for this”. The attention relating to the referendum is only about money.
At the same time, the BoE noticed that in the long-term, the increase of interest rates would be smooth and the treatment of macro statistics is becoming more and more complicated.
This time, the British regulator has moved beyond its usual policy of equanimity and contemplation, because the Brexit event makes nervous almost everyone. One week left until the referendum, and it is going to be very difficult for the Pound.
RoboForex Analytical Department
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