8 Aug 2013
Flash: GBP/USD likely to suffer long term after BoE – Fidelity
FXstreet.com (New York) - The Fidelity Research team grapples the long-term ramifications of the BoE today, with an impact on the GBP/USD.
Key quotes
“The bottom line is, after encouragement from Chancellor George Osborne, the Bank has temporarily given itself a dual mandate with the emphasis shifted in favor of boosting growth rather than maintaining price stability.”
“The details mean the inflation target has in effect been raised to 2.5% CPI from 2.0% until somewhere between 0.25 to 0.75 million new jobs have been created. A complicated announcement was engineered to deliver a simple message. The degree of slack in the economy means policy will stay loose long into the housing-led recovery already under way. This is bullish UK equities and property, bearish GBP/USD, though short run market expectations were already high.”
Key quotes
“The bottom line is, after encouragement from Chancellor George Osborne, the Bank has temporarily given itself a dual mandate with the emphasis shifted in favor of boosting growth rather than maintaining price stability.”
“The details mean the inflation target has in effect been raised to 2.5% CPI from 2.0% until somewhere between 0.25 to 0.75 million new jobs have been created. A complicated announcement was engineered to deliver a simple message. The degree of slack in the economy means policy will stay loose long into the housing-led recovery already under way. This is bullish UK equities and property, bearish GBP/USD, though short run market expectations were already high.”