GBP/USD Falls Below the 1.2900 Level after the BoE

GBP/USD is witnessing some selling in reaction to the Bank of England’s dovish-sounding monetary policy statement. It slipped below the 1.2900 level, new daily lows.

It has not been a surprise that the Bank of England left its interest rates and 

Unsurprisingly, the BoE has left its benchmark interest rates unchanged at a rate of 0.10%. In the accompanying monetary policy statement, the UK central bank recognized an uncertain growth outlook and higher unemployment risk.

The statement has further explained that the Bank of England will continue to evaluate several possible actions and discuss negative interest rates’ effectiveness. The report had a severe influence on the British pound. It was seen as a critical factor behind the GBP/USD pair slip around 70-75 pips yesterday.

The USD can generate short-term trading opportunities

The United Kingdom is pursuing a deal on fisheries with the EU. In the trade talks with the European Union last week, the UK proposed tentative concessions on fishing. Michel Barnier, European Union Brexit negotiator, stated that the UK’s move on fisheries is a ray of hope. He still considers that a deal is possible. However, these events have not impressed the GBP bulls.  

On the other hand, the USD has had to gain on its strong post-FOMC recovery movement. The dollar  fluctuated within a narrow trading range during the European session. However, it has not provided any significant momentum. Sterling price dynamics were acting as the single catalyst for the GBP/USD pair’s momentum on Thursday.

Market participants are looking forward to furthering events. The United States will release the Philadelphia Fed Manufacturing Index, initial weekly jobless claims, and housing statistics, with building permits. The data could act as a supportive factor for the dollar and generate short-term trading opportunities at the American session’s opening.