...Hello TV Traders...
I too, was somewhat puzzled by the large NEGATIVE reaction to this morning's BOE's rate hike...
At minimum, I expected a quiet "non-reaction" since the hike itself has been telegraphed by the BOE for weeks...
The best explanation I found came from Kathleen Brooks (as published on FXStreet.com):
- fxstreet.com/analysis/boe-decision-initial-thoughts-on-drop-201711021229
Her assessment was that this rate hike was NOT the start of a hiking cycle (ala US-Fed policy) but rather just a "one-and-done" deal...
An assessment bolstered by the BOE's own projection of ONLY two rate hikes over the next 2-3 years.
(...in many analysts' views, the BOE did a "Cover-Your-Ass" move to negate last year's emergency post-Brexit rate cut)
As such, traders/investors punished the GBP across all major currency pairs (GBPUSD, EURGBP, GBPJPY)
-----------------------------
So, what's the lesson in all the above..?
When trading the news, ALWAYS try to look beyond the headline numbers...
Sometimes, price action will seem "illogical", but that's only because there's a deeper logic to be found.
Wishing you Peace and Profits...
---$Buddha
I too, was somewhat puzzled by the large NEGATIVE reaction to this morning's BOE's rate hike...
At minimum, I expected a quiet "non-reaction" since the hike itself has been telegraphed by the BOE for weeks...
The best explanation I found came from Kathleen Brooks (as published on FXStreet.com):
- fxstreet.com/analysis/boe-decision-initial-thoughts-on-drop-201711021229
Her assessment was that this rate hike was NOT the start of a hiking cycle (ala US-Fed policy) but rather just a "one-and-done" deal...
An assessment bolstered by the BOE's own projection of ONLY two rate hikes over the next 2-3 years.
(...in many analysts' views, the BOE did a "Cover-Your-Ass" move to negate last year's emergency post-Brexit rate cut)
As such, traders/investors punished the GBP across all major currency pairs (GBPUSD, EURGBP, GBPJPY)
-----------------------------
So, what's the lesson in all the above..?
When trading the news, ALWAYS try to look beyond the headline numbers...
Sometimes, price action will seem "illogical", but that's only because there's a deeper logic to be found.
Wishing you Peace and Profits...
---$Buddha
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.