When is the BOE and how could it affect GBP/USD?
|BOE monetary policy decision Overview
It’s a ‘Super Thursday’ again and time for the Bank of England’s (BOE) take on its monetary policy program, which will be announced at 1200GMT, alongside the release of monetary policy meeting minutes.
The BOE is widely expected to keep the bank rate unchanged at 0.25% and maintain a neutral stance, citing that the interest rates could move in ‘either direction.’ In short, the BOE is likely to adopt a wait-and-see approach amid a combination of high inflation and weak economy, evidenced by a drop in retail sales and softer wages, despite solid employment numbers released a day before.
The BOE’s March meeting is one of those meeting without updated projections or a press conference, and hence, there will be limited market reaction on the bank’s status-quo.
How could the BOE affect GBP/USD?
On a non-event BOE monetary policy decision, the GBP bulls could find some support, yielding a bounce towards 1.2285 levels. A break above 1.2285 (38.2% fib retracement of 1.2570-1.2109) would open up upside towards 1.2346 (Feb 7 high) and 1.2370 (Jan 23 low). On the other hand, a breakdown of support at 1.2203 (10-DMA), could trigger further declines in the pair towards 1.2180/75 levels (Fib S1 support).
Key notes:
GBP/USD Forecast: waiting for the BOE
BoE: Expect no fireworks – Goldman Sachs
GBP/USD: Bears in control, breaches 1.2250 ahead of BOE
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.
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