GBP/USD makes a climb from 1.2940 to 1.3040 after the BOE decision
The initial response saw cable jump up from 1.2940 to 1.3000 before settling back around 1.2970. But cable is getting another push higher now to 1.3040 as we also see the dollar weaken across the board to start European morning trade.
On the BOE decision earlier, the central bank delivered more QE with a £150 billion increase to its gilts purchases - more than the £100 billion expected.
The BOE also doubled-down on their commitment to the economy while reaffirming that QE is the main policy tool for the time being, steering clear of any real hints of negative rates - at least for now.
Despite that, I don't see much reason for the pound to be overly optimistic. As long as the virus situation continues to plague the economy and fiscal support could still prove to be insufficient, worsening economic conditions will keep the pressure on the BOE.
Adding to that is still concerns surrounding the Brexit drama, so that could very well push the BOE over the edge and start to firm up their communication on negative rates.
Looking at cable, price action has now broken back above both key hourly moving averages so buyers are in near-term control. But the key will be to try and keep a push above the 1.3000 handle as the high now runs into some minor resistance @ 1.3031.
The dollar is also weaker across the board to start the session and that is exacerbating gains in cable for the time being.
