We last got a rate cut in November, against an environment of falling inflation. Now we’re looking at the prospect of another one against a picture of continued low inflation but an economic recovery. Lower inflation isn’t off the cards but it looks like it’s stabilising.

Have a look at what happened over and since the November cut.

EURUSD November 2013 rate cut

EURUSD November 2013 rate cut

It’s a warning to shorts not to get too carried away that we’ll be seeing a 500 pip fall from here. We may shift into sell mode and we’re likely to see a few sessions of selling, and a reactionary drop if they do change policy in June, but I’ll be waiting to soak that right up if the data tells me so.