Pound fell after the Bank of England

The views of the foreign exchange market participants on the outcome of meetings of the Bank of England were very different, but generally they can be divided into two groups: those who waited for the conservation rate and the extent of quantitative easing on the same level, and those who, while maintaining rates at 0.50% saw opportunity to increase purchases of securities the central bank to stg25 billion to the upper boundary is agreed upon before the amount of stg150 billion reality turned out to be unexpected, and for those for the other: Bank of England kept rates, but the increase in QE was immediately stg50 billion, that triggered the aggressive sale of the British currency, which now holds about $ 1.6855. Peak of $ 1.6968 was halted around $ 1.6830, and while the Bulls could try to take advantage of bidami deployed up to $ 1.6820, to rebound above, the risks are now leaning in favor of further decline to $ 1.6780 and $ 1.6750.

A pound of good bullish potential

Pound may continue to rise against the dollar, as investors gradually abandon the negative predictions. According to analysts Mizuho Corporate Bank, the net short positions of hedge funds and other large speculators fell to 73 850 for the week ending July 28. The number of net long positions of 72 549. Taking into account the fundamental factors so far the market has to be about 100 thousand long positions. The fact that the actual figures have not yet reached this level, suggests that a pound of good growth potential.

Commerzbank: negatively assesses the prospects for euro / pound

Currency strategists at Commerzbank in the camp of those who expects today from the Bank of England of softness on the issue to stimulate economic recovery and to see the risks increase in the quantitative easing further stg25 billion, while the central bank may, instead of government bonds more focus on corporate debt Commitment. The Bank recognizes that this event will be very negative for the British currency in the short term, but they are advised to use the possible wave of bulls on euro / pound to open short positions, given that the movement will likely be temporary, because the economic statistics gives a clear signals that the Misty Albion situation is better than in the euro area. At Commerzbank had forecast for the euro / pound at the end of the year at stg0.84 and at the end of the first quarter of 2010 - at the level of stg0.83.

A euro / dollar remains the potential for further growth

Euro / dollar in the last couple of days left in a fairly narrow range below the recent annual highs around $ 1.4447 and correctional minima of $ 1.4380/50, where it continues to be traded and is currently waiting for the meetings at the rate of the ECB and the Bank of England and the press conference, Jean -Claude Trichet. Commerzbank analysts see risks that in the near future of the auction will remain the same, but in general they are very optimistic and point out that while a couple remains above $ 1.4200, its future prospects look positive. At Commerzbank pay attention to the fact that the pair break above $ 1.4365 earlier became a signal of potential for growth in the euro to $ 1.4620 and $ 1.4720.

Barclays Capital on the possible reaction of the pound at the Bank of England decision

Today, all the traders concerned about a pound on the general question: whether or not to be quantitative easing in the UK. Decide whether the Bank of England for further action in this direction, or prefer, like the ECB to take a wait and see? According to analysts Barclays Capital, the most favorable solution to the pound would be "dramatic stop", that is, if the Bank's management announced the termination of, or plans for ending the quantitative easing policy. However, it is unlikely to consider in Barclays Capital. Enhanced QE, especially against the backdrop of recent favorable data will be pressure on the pound. It is more difficult case would be the case if the bank has announced a slight expansion and simultaneously reported plans of ending the QE. In this case, the initial reaction is likely to be negative, however, the decline will be seen as a good opportunity to buy.

Societe Generale: The ECB did not help the euro

According to analysts of Societe Generale, the ECB does not help the euro / dollar to reach the level of 1.45. The central bank took a wait-and-see stance, and yet did not think to give up their incentives. Moreover, according to bank analysts, expectations concerning interest rates and oil prices point to the decline of the euro / dollar. Currently, a couple is attempting to grow and traded at 1.4406, despite the recent announcement of the demand on the part of Governors reserves. According to dealers, a substantial interest in the sales recorded in the field of 1.4440. At the 1.4450 barrier option runs from foot to break higher.

A strong euro may be concerned about the ECB

With the return of appetite for risk single European currency added significantly to the price against the dollar and is now located near the highs of the year above $ 1.44, while in March it could be observed near $ 1.26, and in the ranks of market participants are gradually beginning to show concern about the possible consequences of such rapid change of the euro for the fragile economies. From the ECB today, it seems, no one expects the special surprises, but UBS currency strategists note that the euro may have worried the central bank's management, and softer notes, or even a direct comment about the course of a single currency could provoke its sale. In particular, UBS notes the persistence of risk of further reducing the euro / pound. The pair managed to take bidami in stg0.8460/50 for stabilization, but attempts to restore still remain limited, and UBS advised to maintain a short position, given the risks of continuing to fall stg0.8435/30, and then to stg0.8400. Ofer noted some stg0.8485/90, as well as in the area stg0.8510/15.