The Great Britain pound fell against the U.S dollar on Thursday after the Bank of England left rates on hold and cut its forecasts for growth and inflation in 2015 and 2016, indicating that interest rates are likely to remain on hold for longer.
The minutes of the BoE meeting said most policymakers believed underlying price pressures “were not strong enough to justify” tightening.
In its quarterly inflation outlook the bank said the strong pound will continue to push down on inflation and this effect will only slowly diminish.
The outlook also said because of recent falls in oil and other commodity prices, “inflation is likely to remain lower than previously expected until late 2017” and return to the government-set target of 2% in around two years’ time.
The bank also said the weaker outlook for global economic growth posed a downside risk to the U.K. economy.
The BoE’s Monetary Policy Committee voted 8-1 to keep rates on hold and made no changes to its £375 billion asset-purchase program.
Meanwhile the dollar rallied on Wednesday after Fed Chair Janet Yellen said that the U.S. economy was performing well, and that December would represent a “live possibility” for raising interest rates if upcoming economic data supported it.
Separately, New York Fed President William Dudley said he would “completely agree” with Yellen that December is a “live possibility” for a rate lift-off.
Intra-day bias remains bearish as 21 and 55 EMA are crossed downward. Also SSRC and MACD oscillator are signalling more bearish momentum is expected in the pair. However the pair seems to be oversold and selling the rips might be a good idea. More decline to 1.5152 is expected in the short term picture.
Tomorrow investors all over the world would taking a close look at the U.S Job data and less focus on the GBP Manufacturing Production.