The British Central Bank kept its key interest rate

The Bank of England did not change its monetary policy and left its key interest rate unchanged at a record low of 0.25%, which was expected given that Prime Minister Teresa May has scheduled a surprising parliamentary election on June 8, and a change in monetary policy would be very unexpected. This would negatively affect the markets.

Meanwhile, at a press conference, Mike Carney said that British households should expect a tough year.

For the 2017 and 2019 the Central Bank raised its forecasts.

Nomura note, that the impact of Brexit already fades

Analysts at Nomura suggest, that the instability that followed Brexit, already reduced to zero, and the difference in interest rates will soon be again a major factor in currency movements. At the same time the reaction of the GBP to British political risks and to risk appetite has reduced, they added.

Data for the UK will be a key factor in the near future as the further reduction of the GBP is likely to continue if the data in the UK show clear signs of weakness, analysts said.

However, they believe, that the Bank of England will quickly face with a decline in the effectiveness of their policy and this can reduce the impact of factors on the British GBP, as earlier analysts already saw the same reaction in the Eurozone.

After trading in the range of about 1.30-35, analysts continue to expect that GBP/USD will again test 1.30. Nevertheless, analysts believe, that the mid-term potential to reduce the GBP/USD is more dependent on data on US monetary policy unless there is a change in the monetary policy strategy of the Bank of England.