When is the BOE rate decision and how could it affect GBP/USD?
BOE monetary policy decision - Overview
Markets eagerly await the Bank of England’s (BOE) monetary policy decision that will be accompanied by the minutes of the December meeting.
At its monetary policy meeting today, the BOE will announce its interest rate decision and release the minutes of the meeting at 1200 GMT. The December meeting does not have the post-policy press conference held by Governor Mark Carney.
The BOE monetary policy announcement is likely to have limited impact on the pound, as the British central bank is likely to keep the benchmark interest rates unchanged at 0.75%. The voting composition is likely to stay 9-0 in favor of the status-quo.
Meanwhile, the BOE will maintain a cautious tone or language in its the monetary policy statement amid increased odds of a disorderly Brexit that is expected to shave off -7.75% up to -10.50% of the UK”s GDP, as the UK PM Theresa May is finding it difficult to get the Parliamentary clearance on her Brexit deal.
FXStreet’s Editor-in-Chief, Mario Blascak, PHD, notes: “The political uncertainty related to Brexit and recent economic slowdown are both expected to be the main points in the Bank’s accompanying statement along with mention of UK wages rising strongly. The cautious tone of the Bank of England statement is unlikely to result in any substantial money market or currency market reaction.”
How could it affect GBP/USD?
Mario Blascak adds: “Technically, the GBP/USD is at the brink of breaking the downward trendline to the upside with technical oscillators pointing upwards but elevated strongly on a 1-hour chart. Momentum is approaching one week high and the Relative Strength Index is touching the overbought level. The Slow Stochastics is also elevated in overbought territory. The dovish sound from the Bank of England is expected to see GBP/USD return to the nest of ranger-bound trading within 1.2600-1.2700 as Christmas lull on market nears.”
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About the BOE interest rate decision
BOE Interest Rate Decision is announced by the Bank of England. If the BoE is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the GBP. Likewise, if the BoE has a dovish view on the UK economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.