One of the weakest performers today was the GBP as Bank of England Meeting Minutes revealed that two members voted for a larger expansion of the bond purchase program than the £50 billion the bank agreed to in early February.

This certainly went against the sentiment the market had for the GBP after last week's Bank of England's quarterly inflation report which showed the bank forecasting a higher rate for inflation in two years time than expected. At the time the GBP got a boost as market participants got the sense that the BOE may be hesitant to undertake more QE in the future.

Today's Minutes undercut those expectations, and with more QE firmly back on the table, the GBP lost ground against the USD, EUR, JPY and commodity currencies.

From Bloomberg: Sterling fell versus all but one of its 16 major peers and gilts gained as the minutes revealed Adam Posen and David Miles wanted a 75 billion-pound ($117.8 billion) boost in quantitative easing, instead of the 50 billion pounds supported by the other seven policy makers. Gilts also rose before a report this week forecast to confirm the U.K. economy contracted in the fourth quarter, boosting demand for safer assets.

Posen and Miles votes for 75 billion pounds of additional stimulus because of the considerable margin of spare capacity remaining in the economy and the extent of deleveraging still likely to be required, the minutes of the Feb. 8-9 meeting showed. They saw a risk of a prolonged period of depressed demand causing inflation to fall materially below the central bank's 2 percent target.

In an article at the beginning of the week I had looked at some improving fundamental factors in the UK - better retail sales in January, rising housing prices in February, as well as the BOE inflation report - to make the case that the GBP/USD could make a run above its recent highs in an attempt to attack the 1.61 area.

The previous week I had previewed the UK CPI report and made the case that poor fundamentals could undermine the GBP/USD. When the economic data came in better than expected, my short term bias on the GBP had turned more positive.

The jury is still out on the actual path of the economy in the middle of the first quarter but certainly with attention again focusing on more money printing from the BOE the GBP's prospects again look weaker than they did to start the week.

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The expectations for the GBP/USD now would be that we are either going to have sideways price action contained within the range set out in February or if economic data from the UK disappoints - the UK is set to release February manufacturing and services data at the beginning of March - it could work to further undermine the pound, retracing further the rally seen in January.

However, if those releases show that the economy is stabilizing or has returned to some improvement in activity any positive factors from the fundamental macro data would have to battle against the speculation and expectations around more quantitative easing.

That likely means further volatility in a pair that has been quite volatile the last two weeks.

For technical analysis of EUR/GBP see today's technical update: EUR/GBP Pushes Above Key Resistance of 0.84 and Opens 0.85

Nick Nasad is an analyst, educator, and trader; and one of the main contributors to FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.