- GBP / USD is negotiated on Tuesday, standing in the Monday range nearly 1.3520.
- The governor of Boe Bailey sees the rates lower, but warns against increased uncertainty.
- A division within the MPC signals a prudent and data -based rate path.
The British Pound (GBP) is negotiated Tuesday against the US dollar (USD), slightly lower from its intra -day summit while remaining in the Monday range. The GBP / USD pair is stable while the US dollar withdraws slightly by six weeks, market participants considering upcoming American economic data and digesting new comments from Bank of England (BOE) after the hearings of the report on the monetary policy on Tuesday.
At the time of writing this document, the GBP / USD pair is negotiated around 1.3521 during the end of the American session, causing some of the Monday earnings in the middle of a lack of clear directional drivers. Meanwhile, the US dollar index (DXY) features a slight recovery after the drop from Monday to a six -week low, supported by optimistic data on employment openings. The index went up above the 99.00 mark, hovering near the summit on Monday and the last time that the last time about 99.23.
Earlier Tuesday, officials of the Bank of England appeared before the Parliament to offer new information on the political prospects of the Central Bank during the hearings of the monetary policy. The governor of BOE Andrew Bailey reiterated that interest rates are likely to go, but have stressed that the to come is increasingly uncertain. “I think that the path remains down, but how far and how fast is now wrapped in much more uncertainty,” said Bailey, citing increased global trade tensions and their potential to disrupt investments and economic growth.
Sub-Governor Sarah Breeden, centrist of the Monetary Policy Committee (MPC), told legislators that she supported the decline in the rate of May even in the absence of external commercial shocks, reinforcing the bias of the BOE to relaxation. However, the divisions within the MPC remain clear – Swati Dhingra pushed to a deeper cup, warning the drag of tight politics, while Catherine Mann, an external member of the MPC who opposed the reduction in the rate of May, said that the labor market seemed to cool less than it had scheduled in February, when she supported a more aggressive more aggressive reduction.
Overall, BOE hearings have revealed that although interest rates are likely to decrease, there is no clear consensus on the speed with which this should happen. Some members fear that inflation can persist, while others think that the maintenance of too high rates for too long could harm the economy. With clearly divided opinions, the central bank should adopt a cautious approach and data focused in the coming months.
