Into European trading and the impending BoE minutes kept the Pound from feeling the full force of the Dollar rally. Cable dropped to 1.9717 amid the dip but the publication of the 9-0 MOC verdict aided Sterling as hopes increased for further UK rate hikes.
However, it was the news that the BoE mulled over a 50bp move that garnered the most support for GBP from the macro market. Comments that UK rates may need to move again if the "economy grew in line with projections" helped trading bounce back above 1.9750 and offers into 1.9760/70 and 1.9790/9800 were absorbed into the North American open. Cable is now looking to retrace back to the 1.9875 level, which stands as the daily high May 16th, while EUR/GBP looks to drop back to the double-day low at 0.6781 (May 9th & 10th).
However, news that the MPC want to wait for more data could weigh on the short-term outlook. The BoE want to see how the previous four hikes (to 5.5%) since August had affected the economy. A break above 1.9880 adds pressure to the topside while EUR/GBP bears will be encouraged by a break in the cross below 0.6775 support.
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