The pound bulls and bears were as scattered as the boys of Hangover 2 yesterday as they pushed the currency in different directions. While GBP/USD tacked a 55-pip gain at 1.6334, EUR/GBP also rose by 39 pips to .8775. What’s up with that?!
It seems that the currency bulls took it easy on the pound yesterday after worse-than-expected economic reports popped up from the U.K. For one, the industrial production report unexpectedly declined by 1.2% in February, the biggest fall since October 2009. Meanwhile, manufacturing production on the same month failed to register growth at 0.0%. Good thing the Halifax house price index ticked 0.1% higher in March, signaling that the U.K.’s housing market is slowly chugging along from its 0.9% decline in February.
Today all eyes will be on the BOE’s Monetary Policy Committee’s interest rate decision at 11:00 am GMT. While market geeks aren’t expecting an increase from the BOE’s 0.50% interest rates, traders will be at the edge of their seats to see what the MPC hawks and doves have to say about rising prices and slow growth in the country.