The Pound Sterling exchange rate was weakening for two days in a row. That was caused by the newest announcement by the bank of England or BOE. How was it possible?

Their announcement failed to fulfill the people expectation. When this news was released in the beginning of an European Session yesterday or on Friday, the GBP / USD pair declined.

It felt to the level around 1.3900. Meanwhile, the EUR / GBP increased back to the range of 0.8599. However, the analysts from some popular banks think that the BOE announcement may triggers the selling action. 

However, that selling action is only in a short – term period. That is the most possible thing which may be happened in the future. However, some progress are still happened in the trading area. 

The Signs made by BOE

The BoE signalled that it would not in a rush to raise the interest rates in its announcement yesterday - despite believing the economic outlook would continue to improve. 

All policy meeting participants agreed to keep interest rates fixed, and only one member -Andy Haldane- suggested reducing the quantitative easing scale by GBP50 billion. 

The absence of majority support for the QE reduction motion and the rate hike disappointed some market participants. They don’t expect that this thing will appear and happen in the market. 

For your information, Sterling becomes a victim to short-term selling as the BoE did not meet GBP's bullish needs in terms of normalization bets (monetary policy). That was said by Mathias Van der Jeugt, an analyst at KBC Markets.

The Dovish Message was not Really Delivered

The GBP/USD ahead (BoE announcement) attempted to conquer the big number of 1.40 (previous support). However, afterwards (precisely) they fell to the bottom of 1.39 level. 

The short-term trading range becomes 1.38-1.40 based on that situation. However, it is noteworthy that the BoE did not actually deliver a dovish or anti-rate-raising message in its announcement. 

So far, their announcement is only "too bland" when compared to previous market expectations. It is also when you are comparing it to the Fed's planned rate hike from 2023.

That kind of situation triggers the analysts to give their comments and also predictions. That will become a good clue or even references for the market participants. It Is also for the investors. 

What the Analysts Said

Kamal Sharma as the forex strategist at Bank of America argues that the  GBP weakened after the (BoE) decision is symptomatic of a market is likely to expect too much. It is not all. 

He also thought that it is too early from the BoE. Despite the sharp slump occurred, the pound still has a relatively good bid. That was said  by Paul Spirgel as a Reuters market analyst.

Based on the opinions, it means that sterling could stay within its latest range. Basically, nowadays, market is fulled by so many predictions made by the experts in this world. 

Will the Interest Rate be Maintained until 2022?

Some Analysts from Barclays and Capital Economics now reckon the BoE will not change interest rates until 2022. It is in line with the other opinions which are also made by the participants. 

Meanwhile, the economists from ING Bank signaled the BoE should start raising rates in 2023. For your information, that is actually the same time range as the Fed's initial projected rate hike 

Unfortunately, the majority of market participants still take into account the boe's projected rate hike from 2022. It is especially in the pound exchange rate on the forex market. 

As such, the pound is likely to continue to move volatile as the market rectifies the BoE's rate hike projections to match recent developments. That is the biggest possibility to happen.