GBP / USD dropped sharply after the lecture of Carney.

The turn of the year; Speech given by Mark Carney, Governor of the Bank of England;

(Peston Lecture, Queen Mary University of London - 19 January 2016)

- Important is whether the shocks to which others are responding are similar to those with which the MPC must contend...

- First, cost pressures are stronger in the US. Second, the UK economy is twice as open as the US and is therefore more exposed to global weakness.  ... The  stance of fiscal policy differs markedly. ... The UK is undergoing the largest fiscal consolidation. Finally, the Bank of England’s control over macroprudential policy reduces the need to use monetary policy to address financial stability considerations.

- Тhe world is weaker and UK growth has slowed...

- ... Although great uncertainties remain, we are arguably better informed about the dynamics of exchange rate pass through, the prospects for some recovery in productivity growth...

The pair GBP / USD dropped sharply after the lecture of Carney. Currently the pair consolidates near the very strong support level on 1.4220. This is a minimum of May 2010, but new short impulse is very likely.

G.Hristov / Head of Fundamental Analyzes

(source: Bank of England )