GBP/USD rises on hawkish BoE QIR

  • GBP/USD hits a high of 1.5341 after the BoE Inflation Report, up 130 pips from the intraday low
  • GBP/JPY almost back at 184
  • GBP/AUD about to hit the 2.00 level, would be first time since 2009

MacQuarie’s take on the QIR:

On balance, this report is more hawkish than the November one. In particular, the BoE seems keen to look past the low commodity prices, focusing instead in the still firm jobs market to suggest a narrowing of the slack in the economy (from “in the region of 1%” in Nov, to 0.5%). The 2% target was previously only likely to be reached “at the every end of the 3 year forecast period”. In this report, BoE expects inflation to “the 2% target at the two-year period before rising a little further”.

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