The divergence between the Bank of England and the Federal Reserve may weigh on the pound

ChainCatcher news, JPMorgan strategist Matthew Landon said in a report that the potential for the British pound to appreciate against the US dollar appears limited following the latest policy decision by the Bank of England.

The Bank of England cut interest rates by 25 basis points to 4.5% on Thursday, but two of the nine members leaned towards a 50 basis point cut. This vote may reflect concerns about the weak economic growth outlook. The market currently reflects the largest rate cut since last November's US presidential election. Given the weakness in economic growth, it seems reasonable for the Bank of England to diverge more from the Federal Reserve. This "may limit the appreciation of the pound against the dollar in the short term."