GBP/USD Drops on Surprising Bank of England Minutes
In mid-morning trading, the FTSE 100 has moved up around five points, wiping out early losses after a surprising set of minutes from the Bank of England.
It was a weak start this morning but any bears hoping for some relief were quickly disappointed.
There was an early surprise for UK spread betting markets as the latest set of Bank of England minutes came in much more dovish than expected.
The committee was far more split than has hitherto been the case, with three members voting for more easing.
Significantly, outgoing governor Sir Mervyn King was one those opting for more QE.
Not since June last year has there been such a difference of opinion, and back then we saw an increase in asset purchases in the following month.
Unsurprisingly, the pound was given another shove lower on the news, with the GBP/USD spread betting market dropping by more than a cent.
Against this news, employment data had little impact, but this did at least show further improvement for the British economy.
The apparent shift towards more easing by the UK central bank was sufficient to lift the FTSE 100 over the 6400 mark, revisiting this level for the first time since January 2008.
A 1200 point move since June last year is no mean feat, but it still seems as if there is more ground to be won.
Looking to this afternoon, we have plenty of US data, with the Fed minutes being of particular note, while we expect the Dow to start unchanged around 14,035.
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Financial Market Comments from Alastair McCaig, Market Analyst, IG Index.
The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.
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