- GBPUSD drops to lowest this year after BOE keep rates on hold
- Carney press conference fails to stem the declines
- USD lower against all other majors after US CPI miss
- DE30 moves back above the 13000 level
- Crypto ekes out more gains
The pound has fallen to its lowest level of the year against the US dollar this afternoon after the BoE announced they would keep rates on hold at 0.5%. The vote split of 7-2 and comments in the accompanying statement that inflation had fallen faster than previously forecast did little for GBP bulls, as sterling slid lower.
In the press conference Governor Carney attempted to blame the soft Q1 growth on the weather and state that the bank saw the chances of a couple of rate hikes in the next 18 months as "likely", but this wasn’t enough to support sterling.
Even though the GBPUSD fell below the 1.35 level, this is purely a function of GBP weakness rather than strength in the buck. In fact on the European cash close the USD is trading lower against all other currencies. This is due in part to some soft CPI data which suggests that a pick-up in inflation remains unlikely for the time being.
Elsewhere it’s been a good day for indices with reports that Berlusconi has conceded and effectively given the green light to a populist government in Italy boosting equities. Despite this however, a bright start in Italy has faded but the DE30 remains in a positive mood, crossing back above the 13000 level to hit a 3-month high. The US500 has also made good gains and has moved above 2700 to test last month’s peak around 2717.
There’s been some steady gains in the crypto space today with Bitcoin building on recent rises to hover around the 9300 mark. Although Bitcoin does not seem to offer any worth considering trade opportunities those can be quite easily found on Litecoin as the cryptocurrency has come back its 50DMA recently. Looking at the chart we can remind ourselves of the old trading rule claiming that a broken resistance becomes a support and the other way around.
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