GBPUSD is troubling 1.2600 following the BOE MPC meeting
If the market was looking for anything remotely hawkish, it's sorely disappointed. The BOE are happy to let inflation run hot for longer than usual and repeated that they can respond in either direction. Their main worry is that higher import costs and moderating wages will mean weaker household income growth. As I mentioned in my preview, raising rates just on inflation when they're not ready to do so on the state of economy as it is, would act as a double whammy to households.
They also see greater slack than they did in the previous report, so again that's another hint that they don't feel the economy is ready for a hike.
All in all, it's a dovish sounding statement but we'll wait for the presser to get more colour from Carney.
GBPUSD 15m chart
We've got some support down here at 1.2600/1.2590 so watch that level closely. If we hold it then we'll be heading back up. If not, we could see a move to the lower 1.25 area pretty quickly. The first line of resistance looks to be around 1.2630.
