BoE keeps its monetary policy stable by being tied by Brexit

GBP / USD key points:

• The Central Bank of England decided to keep its monetary policy stable.
• This arbitration took place under a transitional perspective, which ends up presenting more clarity regarding the future of Brexit.
• After the announcement, GBP / USD reacted positively and maintains pressure on the descending wedge.

The Bank of England has now taken the baton. During its last to last decision of the year, the bank proceeded to carry out its monetary policy in line with market expectations.

Specifically, the institution led by Mark carney He kept the cost of money at 0.75%. This arbitration was reached unanimously, although with results totally in favor of the present establishment (9-0-0).

Regarding the acquisition of assets, the bank also maintained its statutes by immobilizing the limit on the threshold of 435 billion pounds.

This is far from being a surprise for the market, since as we remember, the entity is currently tied hands because of the complex situation that is experienced due to Brexit. Regarding comments from the BoE, “Lto adequate response by the Monetary policy will depend on the balance of the effects of Brexit on demand, supply and the exchange rate of the pound sterling."

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Regarding the economic evaluation, Carney and company mentioned, after the fall in prices during the month of August, that inflation is expected to continue slightly below the 2% target in the near future.

On a larger scale, the entity mentioned that, since its previous meeting in August, the economic growth scenario has slowed down, while Brexit changes and events have been generating greater volatility in the British economy.

Looking to the near future, therefore, attention in England will clearly remain primarily in the outcome of Brexit and the possible effects it could have on the United Kingdom.

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Chart 30 minutes GBP / USD:

After the decision, the pound sterling has reacted positively and has partially cut the pressures that had been harassing it during the European session.

GBP / USD daily chart:

From a technical point of view, this keeps the GBP / USD exerting pressure around the resistance of the descending wedge.

As we discussed earlier, an activation of this pattern could be the beginning of a larger picture in favor of the pound.

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Written by Quasar Elizundia – Market Analyst

Follow me in @QuasarElizundia