- BoE minutes
The Sterling received little support from the MPC minutes, with the cable inching only slightly above 1.70, however, slumping to an intraday low right after. Nevertheless, positive studies favour fresh rally, and once the pair breaks 1.70 barrier and closes above it, long traders should focus on the immediate target at 1.7041. From the downside, strong psychological level as well as Fibonacci 38.2% retracement is located at 1.69-mark.
Minutes from the meeting held on June 4 and 5 revealed on Wednesday that the Committee voted unanimously in favour of keeping the monetary policy on hold, with the interest rates remaining at 0.5% and the asset purchase programme at 375 billion. Nonetheless, policymakers hinted that a rate increase this year may be more likely than investors forecast, as debates on the potential timing of the first policy tightening are fuelling. The decision to start raising rates is getting "more balanced" for some of the nine-member committee. However, the minutes also showed that policymakers are looking for more evidence the remaining slack is falling. The latest comments forced brokers to upgrade their predictions, saying mortgage rates will rise by an average of 0.25% over the next several weeks. At the same time, economic strengthening pushed the Sterling 8% against the Dollar in the past year, while inflation fell to 1.5% in May, easing some of the pressure on the central bank.
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