The pound rose by 0.85% against the dollar during today's session as comments following the Bank of England interest rate decision kept investors on their toes.
Most investors had been expecting a dovish tone to the Bank of England minutes following the current global uncertainty, which has stemmed from China's economic slowdown.
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However, the minutes showed that recent developments around the globe did not yet appear sufficient to alter the central banks outlook on monetary policy, and meant the Monetary Policy Committee rate vote remained at 8-1 for the second consecutive month.
The news pushed the GBP/USD cross from $1.5340 to a high of $1.5473, the highest we have seen the currency pair since the 27th August.
All eyes on the Federal Reserve.
Now that we have heard from the Bank of England all eyes will now shift to the U.S. Federal Reserve meeting next week. The FED's policymakers are due to meet on the 16th and 17th with the prime focus on interest rates.
For months September had been the date in everyone's diary the FED would finally increase its benchmark rate. However with events in China dominating the headlines it looked as though any decision would be pushed back until at least December.
There is still an outside chance the FED could take action next week, especially if they are thinking along the same lines as the Bank of England.
A rate hike next week will see investors flock to the U.S and the flows into the country will certainly mean the dollar strengthens. How much is anyone's guess but as I have said before I wouldn't be surprised if GBP/USD ended up back towards $1.50.
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