The BOE was out there with its rate announcement and statement and also with its monetary policy summary but none of these seemed to have too much of an impact on the pound which continues to chop around above 1.34 as of this writing and by the look of things, this is the price action that we are likely to see over the next couple of weeks as well.
BOE Keeps Rates on Hold
The BOE kept the rates on hold, which was something that was widely expected and the voting was also along expected lines only and this did not seem to have too much of an impact on the pound. The summary also did not add too much that the market did not already know of and this added to the consolidation in the GBPUSD pair. The retail sales data from the US came in stronger than expected at 0.8% but this also did not affect the pair too much which chopped around for much of the time.
By the look of things, we seem to be ready to move into Phase 2 of the Brexit talks which is the more crucial phase as it involves the discussions around trading. The UK would want to continue to have access to the trading zone that the Eurozone has and this is likely to be the key part of the talks as it would determine how the industry on either side would fare, as far as trade is concerned, once the Brexit process is complete. So far, the progress in the talks have been positive and that is why we are seeing the pound responding positively so far in its moves.
Looking ahead to the rest of the day, we do not have any major news from the UK or the US for the day which should mean some consolidation and ranging on either side of 1.34 for the day. With the market winding down to the end of the year and a period of holidays, we can safely expect this ranging and consolidation to continue till the end of the year.
This article was originally posted on FX Empire