Key takeaways from the BOE minutes
As it was expected, GBP/USD weakened below the $1.7060 mark post the MPC minutes release.
- The document brought no surprises with all the 9 Commitee members voting to leave rates unchanged. There was no inspiration for the hawks in the document, but market particpants know that the July meeting was held before the upbeat UK inflation release.
- MPC has no preset view rate rise terms, it will be data-dependent;
- Indications of inflationary pressures areincreasing;
- BOE expects Q2 GBP growth of 0.9% before slowing modestly in Q3 & Q4. UK Q1 GDP will be revised up to to 0.9%. (Don't forget that Q2 GDP will be released on Friday).
Waiting for the BoE Governor Carney speech at 11:45 GMT. Given the upbeat GDP forecast, we expect cable to remain supported at 1.7040.
Chart. H1 GBP/USD