Cable fell by 100 pips on the decision before bouncing a little
The drop in cable stalled at the 76.4 retracement level @ 1.2838 with minor support around 1.2868 helping to limit the downside move for the time being.
Despite the surprise announcement by the BOE, quite a bit of it has been priced in already as noted in the post earlier here. The rates market has been pricing in something big by the BOE for over a week now and they finally delivered on those expectations.
For the pound, the near-term outlook points to more pain - especially in EUR/GBP in my view - but if lawmakers and policymakers can work hand in hand (remember, budget to follow later today), then the medium-term outlook may look better for the UK economy.
