The British pound remained under pressure after yesterday, the head of the Bank of England, Mark Carney, said that plans for raising rates could change in response to a sharper than predicted Brexit.
The matter is that because of the complication of the situation with the withdrawal of the UK from the EU, the Bank of England may refuse the planned tightening of monetary policy or lower rates if necessary.
Mark Carney noted that he can abandon plans to raise rates in the absence of a transition period, or if the trade relations between the UK and the EU are more complex than economists and experts expect.
Let me remind you that earlier, the Central Bank of Great Britain announced its intention to further raise interest rates on condition of good economic growth. At least three rate hikes were expected, subject to annual growth of the country's economy at around 1.75%.
Today there was a report, which indicated that the capital investment of companies in the UK in the first quarter of this year showed a low result. This suggests that weak economic growth and uncertainty with Brexit continue to put pressure on companies.
According to the National Bureau of Statistics, capital expenditure for the first quarter of this year decreased by 0.2% compared with the previous quarter.
The data on the growth of the UK economy in the 1st quarter of this year also did not give confidence to the buyers of the pound. According to the Bureau of Statistics report, GDP growth in the 1st quarter remained at the level of 0.1%, while on an annualized basis the economy grew by 0.4%.
As for the technical picture of the GBP / USD pair, yesterday's bullish correction today is fully played by the sellers. The new correction wave can only be considered if the pair is held above the support at 1.3340, where the lower limit of the uplink can be formed with a control point from the May 23 minimums. The break and consolidation at the resistance level of 1.3390 open a realistic prospect for further recovery of the pound with a test of highs from May 24, 1.3420 and a way out to 1.3470.
Today, it also became known that US Secretary of Commerce Wilbur Ross is preparing a business trip to China, which is scheduled for early June this year. The purpose of the trip will be the implementation of previously reached agreements between the US and China.
