The GBP/USD has hit a fresh post-FOMC high this afternoon. Like the Bank of Japan and Swiss National Bank, the Bank of England decided to keep its monetary policy unchanged. BUT it wasn't a unanimous decision as Kristin Forbes voted for a 25 basis point rise amid concerns over inflation.
This caused the pound to jump across the board. Meanwhile, the Queen has given the go ahead for Prime Minister Theresa May to trigger Brexit Article 50. This was expected and thus didn’t cause the currency to weaken. But with the UK set to start the process of leaving the EU in the coming days, and Scotland potentially on the verge of holding a second independence referendum, uncertainty remains high which could limit the gains for the pound.
That being said, much of the negativity is already priced in. Thus, unless economic data deteriorates significantly now, sterling may well be on the verge of a notable comeback.
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