(MENAFN- DailyFX) Talking Points
- Sterling remained range bound after the Bank of England left monetary policy unchanged, as expected.
- BOE says recent progress in Brexit talks reduce the likelihood of a ‘disorderly exit.'
: they're free and have been updated for the fourth quarter of 2017
The Bank of England (BOE) left all monetary policy measures unchanged as expected Thursday, but warned that UK Q4 growth may be slightly weaker than Q3. The Bank Rate remained at 0.50%, the Asset Purchase Target at GBP435 billion and the Corporate Bond Target at GBP10 billion. The central bank also said that inflation is ‘close to its peaks' and will decline towards 2% target in the medium term. They added that wage growth has been in line with expectations, after disappointing in previous years.
Recent data from the ONS showed UK inflation hitting 3.1%, up from 3% in October, the highest level in nearly six years due to the rising cost of computer games while air fares fell more slowly than this time last year. In addition, UK unemployment remained at
remained fairly muted post-release, trading around 1.34200. On the other side of the pair, the Thursday despite the Federal Reserve hiking interest rates at last night's meeting and indicating that there would likely be three more hikes in 2018.
GBP/USD Price Chart: One Minute Timeframe (December 14, 2017)
data show 45.5% of traders are net-long GBP/USD with the ratio of traders short to long at 1.2 to 1. The number of traders net-long is 20.1% lower than yesterday and 1.6% lower from last week, while the number of traders net-short is 13.9% higher than yesterday and 3.7% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBPUSD-bullish contrarian trading bias.
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--- Written by Nick Cawley, Analyst
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