Though the BoE tried not to be “hawkish” today, if CPI continues to accelerate further, Carney will have to intervene at some point in the future. And the next hike may take place earlier than the market expects assuming that Brexit negotiations don’t fail.
Moreover, despite the fact that sterling’s bullishness is still capped by the notorious political uncertainty around Brexit, we have decent UK economic fundamentals and dollar weakness which may not be cured by Trump’s tax plan (if approved at all). So the longer-term GBPUSD outlook looks , especially considering the risk of slowing down the Fed’s rate hikes amid stubbornly low .
After a brief dive under the 1.34 handle, the pound recovered partially, but stays under a mild short-term pressure. Earlier, the pair failed to extend the local rally above the weekly highs in the 1.3465 area. The most attractive strategy now may be to look for another pullback towards lows around 1.33 for opening new longs.