GBP/USD: Carney’s speech
- The Bank of England will consider more stimulus if financial conditions tighten or recovery risks falling short.
- There are signs that the UK economic recovery is broad based, set to continue.
- Upward move in market expectations of BOE rates could, at margin, affect real economy.
- Nobody should assume that 7% unemployment will be trigger for rate hike.
- It is right to bring inflation back to target more slowly.
GBP/USD jumped from $1.5426 to $1.5550 before weakening to $1.5510. Carney wasn’t as dovish as expected. In fact, his comments about economic recovery were positive.