12, February 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

Mark Carney caused the volatility in the charts on Thursday, but not in pairs with CAD. Instead, he supported the pound by the end of the trading week! He was chosen to replace Mervyn King as the next head honcho BOE in July this year. Therefore, market participants paid very close attention to what Carney said. This explains why we have seen such movements in pairs with GBP after the rate decision of the central bank. In fact, his interview in the British Parliament was more interesting than the announcement of the Bank of England monetary policy! Before there was a report on the manufacturing PMI in January that disappointed markets (forecast 51.0) - 50.8. NIESR also lowered its growth forecast for the UK from 1.1% to 0.7%.

However, it seems that the recent negative data was not enough to alarm the British bankers. MPC kept interest rates unchanged at 0.50% and made no changes in the amount of asset purchases at 375 billion pounds. It would seem that the Bank of England still wants to wait until the scheme Loan financing will come into force before the application of other measures weakening. According to the Bank of England, the mortgage market is beginning to show signs that the program is working as it was launched in August.

However, in his speech on Thursday, he hinted that such changes will occur later rather than sooner, as they should be the subject of a very thorough analysis. Perhaps the most important conclusion from his interview in the Parliament that the current monetary policy may be sufficient to help economic growth. He said that the maintenance of monetary stimulus unchanged for a period of time will be needed to increase the confidence of consumers and businesses. In doing so, he made it clear that the central bank will be flexible in meeting their goals for sustainable growth. Of course, because that Carney did not sound as gently as markets expected (aggressive mitigation measures), the pound was up against the right of his rivals. GBP / USD jumped almost 100 points within minutes after Carney began his speech, while the GBP / JPY added 68 points for the day.

The pace of consumer price inflation in the UK January remained well above the target level of the Bank of England. These points to the continuing pressure on household incomes, which may cause a delay in the economic recovery of the country, which is experiencing difficulties.

According to the results of its meeting held on Thursday, the Bank of England left its monetary policy unchanged. He said inflation is projected to exceed the target level for another two years. But the central bank is unlikely to react to policy tightening, if not increase domestic demand.

Data on retail sales, which the National Bureau of Statistics will release within a week, will point to the current state of consumer spending.