BoE monetary policy decision - Overview
Thursday's key focus will be on the Bank of England’s (BoE) monetary policy decision that will be accompanied by the minutes of the March meeting. The UK central bank is widely anticipated to maintain status quo and leave benchmark interest rate, asset purchase facility unchanged at 0.75% and £435 billion respectively. Given the recent Brexit chaos, the voting pattern is likely to show a unanimous decision for no changes to the current monetary policy stance.
As Yohay Elam, FXStreet's own Analyst explains: The growing uncertainty about Brexit has paralyzed all policymaking in the UK, and this includes the institution led by Governor Mark Carney. The UK will leave on March 29th unless an extension is granted. The latest is that the EU will decide on a delay next week, at the very last moment, and PM May still hopes to have Parliament approve the deal. Fears of a no-deal Brexit are mounting.
How could it affect GBP/USD?
The pair traded with a bearish bias around one-week lows ahead of the key event risk, though reaction to the BoE announcement seems more likely to be limited. Meanwhile, Yohay offers important technical levels to watch for: “1.3135 is the confluence of the Fibonacci 38.2% one-month, the Pivot Point one-day Support 1, and the Fibonacci 61.8% one-week.”
“Looking up, resistance is much weaker than the support lines mentioned above. 1.3286 is the first hurdle, where we see the meeting point of the previous daily high and the Fibonacci 23.6% one-week. The high target for the pound is 1.3355 which is where the Pivot Point one-day R2 and the previous monthly high converge,” he added further.
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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