LONDON (Reuters) – Sterling hit a 16-day low against the dollar on Thursday, despite some letter of respite, after the Bank of England, the policy, dominated by the uncertainty about how Britain will be the ease of its corona virus lock and brexit.
FILE PHOTO: the Paper notes and coins are seen inside a cash register in a bar in Manchester, united Kingdom, September 6, 2017. (REUTERS Photo/Phil Noble/
As widely expected, the BoE hero rates steady and announced no new stimulus measures, saying that it was ” prepared to take further measures to combat the corona virus (the pandemic game.
The government is due to announce possible changes to the social restrictions on a Sunday. A spokesman said that the Prime Minister, Boris Johnson was going to announce a very limited number of easing, or the locking action.
Analysts said that the book of the letter and the exchange that followed the BoE announcement, was more due to an offer of a resumption of recent sterling weakness as any surprise to the central bank.
“The book brings to the stage a ” reflex relief rally as there were some expectations that the BoE would extend quantitative easing,” Lee Hardman, a currency strategist at MUFG.
In what he called an illustrative scenario, the BoE forecasts Britain is the greatest economic crisis in more than 300 years of 2020, with a 14% contraction of growth, and 15 per cent bounceback in 2021.
The pound strengthened to as much as $1.2418 after the announcement, but has steadily declined from around 1100 UTC, reaching a low of $1.2266.
“But the BoE is likely to expand asset purchases, so-this is why there has been only a short-term boost for the pound today”, MUFG’s Hardman said.
The british pound was last at $1.2274, falling below $1.23 for the first time in two weeks, down 0.6% since the New York close.
Compared to the euro, which has also seen a letter to the post-BoE rally, this is the last of the at 87.78 pence, down 0.4%.
(Graphic: the announcement of the BoE ski lifts, and the sterling lord)
The central bank’s Monetary Policy Committee maintained the Bank Rate to its lowest level of 0.1% and left its target for the obligation to purchase, it is British government debt, to 645 billion pounds ($797 billion).
But two of the nine policymakers have voted for £ 100 billion over the purchase of the bonds of the power of fire.
In addition to the purchase of the bonds is expected in the coming months, and a suggestion of the bank’s 200 billion of asset purchases announced in March, could be missed by the end of July, could also have played a role in the emergence of the book, Rabobank Senior FX Strategist Jane Foley says, as he has supported the expectation that new stimulus measures will be announced.
The BoE should consider what it should do with its bond-buying programme in June, when there will be more clarity on how the government intends to raise its corona virus this time, Governor Andrew Bailey said.
Britain has been slower than other European countries to announce plans to facilitate this moment of your cube, which is considered a risk to the downside of the book.
Brexit risks, are also back on the negotiating table, with Britain insisting that it will not seek an extension of the transition period, which is scheduled to end in December 2020, whether or not a trade agreement that has been struck.
The EU’s trade chief has said that there is no real sign that Britain is getting closer, trade talks with the European Union, with a plan for success, and he seems ready to blame after brexit the game on the economic shock of COVID-19.
“The sterling market waits for more comment and details around the front direction, but in the grand scheme of things, it is very comfortable with the BoE, and watch for more clarity in this time of relaxation and “brexit” the transition in the VALUE guide, the center of applied economics, sterling trader at Barclays capital, said.
Reporting by Elizabeth Howcroft; Additional reporting by Dhara Ranasinghe; Editing by Toby Chopra, Raissa Kasolowsky and Alexander Smith