Another chapter in the Brexit book gets closed after the BOE make their move. It's up to the government to make theirs now
Carney's done. He eased, he answered and now he's off to lunch. The pound still looks fairly undecided and will need a bit more time to work out what it wants to do. Although Carney said they are ready to cut further, it's unlikely they will do that so soon and they can now have the luxury (if you can call it that) to sit back and really see what Brexit brings.
The next stage is what the government will do. I'm getting the looming feeling of disappointment on that front. This was a huge opportunity for both the BOE and government to send a big confidence message to the UK and the world and they blew it. Maybe it's due to May's new government make up that they haven't finalised their plans. If so, that's a poor excuse. I've already heard from a wealth manager who said this action isn't going to make a blind bit of difference so the government really needs to pick up the baton.
For the pound and trading, any future fiscal news is unlikely to add much to the equation, unless it brings a very clear and strong message about what it means for the economy. The monetary side of it is unlikely to make many waves. It will purely be a question of confidence and sentiment that will drive the pound. Don't forget also that any measures will negatively hit the country's budget and debt numbers too.
For right now, the pound has a clearly defined range between 1.3180 and 1.3100. We can probably extend the topside to include 1.3200, and the lower to include 1.3070/80. For all the noise, news and chatter, just trade what you see.
For my plans for the longer term, I'm going to let things play out for a while longer before deciding whether to trade or not.
