Bank of England (BOE) fears that a strong Pound Sterling GBP will choke off the economic recovery in the UK economy. This thursday, BOE decided to keep the interest rates unchanged and the asset purchase targets unchanged amidst fears of GBP becoming strong and choking off recovery in UK economy. While a strong currency and bullish news that the U.K. economy is slowly returning to normal might be good for some, businesses have complained of pricing pressures. AB Foods, which owns retailer Primark, said Thursday that strengthening sterling was having “adverse effects” on its trading.The director general at the British Chamber of Commerce John Longworth said this Thursday that Bank of England should hold off interest rates as long as possible.
GBP/USD had been ranging last week. BOE Governor Mark Carney speech on Tuesday this week is going to decide whether GBP/USD breaks up or down. You need to wait for the BOE Governor speech this Tuesday.