Forex Market Commentary for Februrary 8 2019

New British One Pound Sterling

We’ve had quite a bit of movement in the FX market over the past 24 to 48 hours today. The currency that that everyone’s focusing on is the British Pound. We had the Bank of England monetary policy announcement the Bank of England left interest rates unchanged. The decision was not a surprise as they are in no position to change interest rates. Due to overall weakness of the economy as well as the ongoing Brexit uncertainty.

What’s interesting about the BOE rate decision as well as the move in sterling is that first of all the Bank of England said that Britain’s uncertainty is going to continue and as a result, they lowered their GDP forecasts. This actually drove the British pounds below 129 against the US dollar.

Even though the BOE governor lowered the forecast his tone wasn’t entirely pessimistic. He remained hopeful that the UK government was going to reach a deal and that their forecasts on the presumption that they would reach a deal called for recovery in spending.

Theresa May the prime minister said to Parliament’s that if she does not come back with some sort of meaningful change to the Brexit withdraw agreement by February 13th for the Parliament to vote on, they can begin a Brexit debate again on the 14th.

That’s a date that you know everyone’s kind of focusing on Theresa May was in Brussels to talk to the European Commission and according to according to the European Commission it seems like there’s still very far away from an agreement. It doesn’t look good and for that reason there could still be some downside risk in the British Pound.