Questions begin on what the Bank of England will do to stem GBP’s drop off the cliff

Its 2.30am in London, so there are only a few hours before bums hit the seats Bank of England

Bank of England

The Bank of England (BoE) functions as the United Kingdom’s central bank and is one of the key drivers of monetary policy in Europe. As one of the world’s oldest central banks and established in 1694, the BoE is owned by the British government. Its central mandate involves maintaining and targeting interest rates while using other tools to help either stimulate or contract the economy. Moreover, the BoE is responsible for producing the UK’s bank notes as well as supervising key bank payment systems. The bank helps not only craft monetary and financial stability within the UK but also yields enormous influence on the country’s currency, the British pound. How does the Bank of England (BoE) Affect Forex Traders? The BoE is one of the most closely watched central banks by forex traders, along with the US Federal Reserve and the European Central Bank (ECB). FX traders are regularly tuned into any updates out of the central bank given its potential to affect the pound and many other currency pairs. The Euro for example is highly correlated to the pound. Furthermore, the bank also has at its disposal a variety of monetary policy tools that are capable of impacting the pound. One of the most common of these historically has been quantitative easing (QE), among others, which can increase or decrease the value of the pound. Beyond FX, the BoE helps address domestic inflation, tinkering interest rates to stimulate the economy. Many investors are aware of the BoE interest rate as this measure is instrumental for a variety of economic barometers.

The Bank of England (BoE) functions as the United Kingdom’s central bank and is one of the key drivers of monetary policy in Europe. As one of the world’s oldest central banks and established in 1694, the BoE is owned by the British government. Its central mandate involves maintaining and targeting interest rates while using other tools to help either stimulate or contract the economy. Moreover, the BoE is responsible for producing the UK’s bank notes as well as supervising key bank payment systems. The bank helps not only craft monetary and financial stability within the UK but also yields enormous influence on the country’s currency, the British pound. How does the Bank of England (BoE) Affect Forex Traders? The BoE is one of the most closely watched central banks by forex traders, along with the US Federal Reserve and the European Central Bank (ECB). FX traders are regularly tuned into any updates out of the central bank given its potential to affect the pound and many other currency pairs. The Euro for example is highly correlated to the pound. Furthermore, the bank also has at its disposal a variety of monetary policy tools that are capable of impacting the pound. One of the most common of these historically has been quantitative easing (QE), among others, which can increase or decrease the value of the pound. Beyond FX, the BoE helps address domestic inflation, tinkering interest rates to stimulate the economy. Many investors are aware of the BoE interest rate as this measure is instrumental for a variety of economic barometers.
Read this Term.

There is some chatter about (its speculation) that the BoE will implement an emergency rate hike to dissuade further GBP

GBP

The Great British pound (GBP) or pound sterling is the official currency of the United Kingdom, Jersey, Guernsey, the Isle of Man, Gibraltar, South Georgia, and other pacific territories. The GBP is currently the fourth most-traded currency worldwide in forex markets after the US dollar, euro, and Japanese yen. As the oldest currency in continual use, the GBP holds great weight on the world market and is also the fourth largest reserve currency. The Bank of England (BoE) is the central banking authority responsible for the curation of the GBP, issuing its own banknotes, as well as regulating the issuance of banknotes by private banks in both Scotland and Northern Ireland. What Factors Affect the GBP? Like any widely traded currency there are several factors that affect the GBP. As is often the case, monetary policy is extremely impactful. Any announcements or policy decisions by the BoE are always closely watched given its potential to move the GBP. Additionally, consumer prices (CPI) in the UK as well as levels of inflation carry a lot of weight and routinely affect the value of the GBP in forex markets. Other metrics of note include measures of gross domestic product (GDP) in the UK or growth, consumer sentiment, or confidence. Most recently, the drama surrounding Brexit as well as the potential fallout of negotiations have added another layer of uncertainty to the GBP. The UK at the time of writing is headed for a historic schism with Europe, although a deal has not yet been agreed upon with both sides unable to come to an agreement. With a smooth resolution nowhere in sight, any developments or an eventual finality to Brexit will be extraordinarily important to both the short- and long-term value of the GBP.

The Great British pound (GBP) or pound sterling is the official currency of the United Kingdom, Jersey, Guernsey, the Isle of Man, Gibraltar, South Georgia, and other pacific territories. The GBP is currently the fourth most-traded currency worldwide in forex markets after the US dollar, euro, and Japanese yen. As the oldest currency in continual use, the GBP holds great weight on the world market and is also the fourth largest reserve currency. The Bank of England (BoE) is the central banking authority responsible for the curation of the GBP, issuing its own banknotes, as well as regulating the issuance of banknotes by private banks in both Scotland and Northern Ireland. What Factors Affect the GBP? Like any widely traded currency there are several factors that affect the GBP. As is often the case, monetary policy is extremely impactful. Any announcements or policy decisions by the BoE are always closely watched given its potential to move the GBP. Additionally, consumer prices (CPI) in the UK as well as levels of inflation carry a lot of weight and routinely affect the value of the GBP in forex markets. Other metrics of note include measures of gross domestic product (GDP) in the UK or growth, consumer sentiment, or confidence. Most recently, the drama surrounding Brexit as well as the potential fallout of negotiations have added another layer of uncertainty to the GBP. The UK at the time of writing is headed for a historic schism with Europe, although a deal has not yet been agreed upon with both sides unable to come to an agreement. With a smooth resolution nowhere in sight, any developments or an eventual finality to Brexit will be extraordinarily important to both the short- and long-term value of the GBP.
Read this Term selling. This will be a death knell for the UK economy (I’m overstating it, it won’t die but it will be a catastrophic step for the economy).

Alternatively, that the Bank will step in to buy GPB, placing ‘floor’ bids or paying offers.

Stay tuned.

p.s. Please ignore those explaining this as a ‘fat finger’ or a ‘flash crash’. Its neither. Its fundamentally driven selling and then ‘get me the **** out’ selling on top of it.

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