In the markets , news is just a story
and u know stories are stories.
you can be 100% academically right in analyzing the news but the markets may react in a completely different way.
so when it comes to news, it's important how the market reacts and not the news.
as a rule of thumb, avoid trading around such highly volatile times, stay on the side lines till the market choose clearly which way to go.
How about some kind of confidence in the BOE as it is showing they are willing to slash the rate even further?
I'm actually shorting the £ now and i was a bit surprised today, but, even the Fed slashed rates and the $ has gone up! News don't have anymore the effect they used to, it has been like this since the beginning of the mess.
Perhaps 0.75% was expected, or buyers had their interest piqued by a readiness to take action beyond the mere cutting of interest rates (which let's face it, probably haven't made a blind bit of difference) - the policy of 'quantitative easing' was mentioned in the accompanying statement. Not that I think this will have any discernible positive effect upon the economy either. Back when I was studying Economics we had an equation called MV=PT which stated that if you increase the money supply then prices will rise. Apparently no-one at the BoE bothered with that class. Keep digging boys!
