Forex Market Update: British Pound Remains Under Pressure as BoE Holds Dovish Outlook

Cable fell sharply after a Swiss name sold a large amount on behalf of a Middle Eastern name to send the pair from 1.6420 down to 1.6345 lows. The interest to sell Cable lifted EUR/GBP from out of the 0.8500 area to hit 0.8537 highs. The Cable sell-off has pushed the pair away from today’s option strikes at 1.6460 and 1.6500. Overall, GBP has traded defensively since Wednesday’s Treasury Select Committee hearing, which saw fairly dovish rhetoric from BoE Governor King, who stressed it is not about to hike rates. The hearing also suggested that the MPC remains wary of placing too much emphasis on early “green shoots”, stressing that the recovery remains uncertain. Elsewhere, GBP/JPY was boosted by investment trust demand in Asia and early Europe to lift it in to 158.50, but the latest GBP sell off knocked it back in to the 157.50 area. Movement from here will be dependent on equities, which are struggling early on.