Published at 12:18 (GMT) 08 Aug
While the majority of FX trading has been non-descript, dominated by firming USD as equities slip and slide, it is GBP that has kept the market interested. The BoE's Quarterly Inflation Report was expected to indicate that inflation expectations were down and that economic growth prospects were lower. That is what the report stated. But, GBP rallied on the back of comments from BoE's King who "blamed" some of the poor performance on one off factors and the turmoil/knock on impact from the eurozone malaise.
Bottom line and the reason GBP has bounced is the strong indication that the BoE is unlikely to change policy, instead it has chosen to give existing initiatives time to work. The news is not new. M.B.