The BoE made another step towards rate cuts with a negative revision to inflation forecasts and Ramsden joining Dhingra for a rate cut. Not big surprises but the addition of the line saying "will consider forthcoming data releases and how these inform the assessment that the risks from inflation persistence are receding" suggests that the BoE might even cut in June if we get downside surprises in the inflation figures. Moreover, Governor Bailey added that they cannot rule out a rate cut in June and that they might even cut more than the market currently expects. Overall, it was more dovish than expected, so why the GBPUSD pair hasn’t sold off?
When you are trading FX, you should always consider the other side of the pair. That's why choosing the best currency pair to express your idea is key. The market, in fact, is still waiting for the US CPI release next Wednesday before breaking out on either side. At the moment though, there’s a slightly overall positive risk sentiment which is generally negative for the greenback.
Moreover, the miss in the US jobless claims added some more pressure on the USD as the market weighs the possibility that the labour market could weaken fast enough in the next months to justify more rate cuts than expected. Finally, do note that for the major currency pairs, 80% of the moves are mainly driven by the USD strength or weakness.
