GBPUSD trades at 1.3313 ahead of comments
BOE Tenreyro says:
- She expects gradual tightening of monetary policy will be needed over the next 3 years
- A few rate rises will be needed but timing is an “open question”
- Much of weakness in UK in 1Q likely to be erractic but raises possibility of some underlying weakness in demand
- exchange rate pass through effect on CPI will fade slightly more quickly than we expected
- Tightening of UK labour market likely to lead to pick up in domestic cost pressures
- Future changes in policy can act as substitutes for immediate change
- Recent political uncertainties in Europe mean Bank of England must remain watchful about global economy
- Costs of waiting short period for more information are small, clearer picture of domestic demand likely quite soon
The market reaction is somewhat muted. The GBPUSD was trading at 1.3313 prior to the headlines. It is now trading at 1.3315.
The price of the GBPUSD trades between the 100 hour MA at 1.33044 and the 200 hour MA at 1.33198 (over the last few hours of trading). There was a break below the 100 hour MA, but that move failed.