Tuesday’s data points could serve as an ominous sign for sterling and FXB heading into Wednesday when traders will digest not only commentary from BoE, but also U.K. retail sales data. Following its meeting earlier this month, BoE left interest rates unchanged and made no alterations to its bond-buying program.
Recent data indicate the U.K. economy has narrowly averted another recession and with interest rates at 0.5%, the central bank has some, though not much wiggle room left to cut rates. Noteworthy for FXB is the fact at recent meetings, several BoE members – including governor Sir Mervyn King – have voted to added 25 billion pounds to the bank’s 375 billion-pound quantitative easing program, the BBC reported.
Firm support for GBP/USD is 1.50 and any violation of that level could take FXB back to its March lows around $147. The ETF has not closed below $147 in nearly three years.
ETF Trends editorial team contributed to this story.