THE TAKEAWAY: BoE warns that banks are vulnerable to an abrupt increase in interest rates -> BoE further concerned with global economy risks -> Little Pound reaction
The Bank of England warned in its semi-annual financial stability report that banks are vulnerable to an abrupt increase in interest rates. The BoE further warned of the stability risks from a weak global economy and Euro-area, and said that the confidence in the financial system remains weak.
There was little Pound reaction to the stability report, as was predicted by DailyFX’s Currency Strategist Ilya Spivak earlier today. Look at Ilya’s Euro Open for an explanation of the meaning and history of the financial stability report.
However, the Pound is the overall biggest loser in today’s Forex trading at the time of this writing. GBP/USD is currently trading below the 1.5400 figure, and the pair may next see support by a three-week low at 1.5343.
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GBPUSDDaily: June 26, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .