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GBP/USD Rebounds off MAs after BOE Bailey’s Statement
The Governor of the Bank of England is expected to deliver a speech today, but he released a statement of the content of his speech a bit earlier. The comments there had a nuance of optimism, coming from the coronavirus vaccine, and they also confirmed that more QE would be coming up, as the UK has gone into another lock-down. The GBP/USD was leaning on the 100 SMA (green) on the H1 chart, which is acting as support, but the price bounced higher and is now 60 pips up.
Comments by BOE governor, Andrew Bailey
- QE at a time like this can prevent unwarranted tightening in financial conditions
- BOE’s actions are not monetary financing
- We have had encouraging news on the vaccine front
- Vaccine news will play a major role in lowering the level of uncertainty
- We can now see some light at the end of the tunnel
- But need to focus more on how the economy will look in the future
- There are no grounds for complacency, expect BOE to be cautious
- Full speech
He sounds a tad more optimistic after the recent vaccine news, as that may help to steer some of the pressure away from the debate on negative rates for now. But as the UK economy continues to underwhelm and Brexit uncertainty reigns, it may be tough to distract from further easing measures for too long. Bailey was scheduled to speak at 11:15 GMT, but the BOE released the text of his speech ahead of time.
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