Today’s unexpected drop in industrial production and manufacturing underscores the weakness of the economy. The UK economy has largely stagnated over the past 9 months. Inflation pressures appear to be easing, but are still elevated.
Short term interest rates continue to remain easy, and the likelihood of the BoE tightening in the near future is waning.
The minutes from last week’s BOE meeting will be published later this month, but there is already a strong suspicion that the dissenting hawks at recent meetings have weakened in the face of the economic data. Cutting the growth forecast will be both the cause and effect of stronger dove views.
The pound is moving close to break down levels after consolidating during the past 2 weeks.
The Trade – Purchase a daily binary put option on a close below 1.6210. The floor on the trade is 1.6140.
Asset : GBP/USD
The trade : Binary Put Option
Expiry time : End of day
When : On a close below 1.6210, The floor on the trade is 1.6140