The British Pound today spiked against its main competitors after the Bank of England monetary policy statement even as the bank hinted at a less dovish outlook. The British pound rallied after the BoE’s Monetary Policy Committee maintained the rate decision and its asset purchase target at the same level, but issued a slightly hawkish economic outlook.
The British pound gained over 100 points against the US dollar and gained over 1 yen in value against the Japanese yen during the abrupt spike.
The spike occurred after the MPC minutes indicated that the BoE views the British economy as being in a state of steady economic expansion, which was also boosted by strong overseas growth. The MPC minutes also indicated that one MPC member had voted in favor of a rate hike, which implies that some members believe that a rate hike might be needed in the near future.
The currency was also affected by the weaker US dollar after the Federal Reserve hiked interest rates, but highlighted a dovish outlook for the US economy. The currency was also affected by the weaker Japanese yen after the Bank of Japan maintained its Policy balance rate at -0.10%.
The currency is likely to be affected by the triggering of article 50 by British Prime Minister, Theresa May, scheduled for later this month in order to leave the EU.
The GBP/USD was trading at 1.2361 as at 15:51 GMT having spiked from a low of 1.2243 before the BoE announcement. The GBP/JPY was trading at 139.80 having risen from a low of 138.92 prior to the announcement.
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