The focus today will be the BoE interest rate decision which will be accompanied by the meeting minutes and the U.K. quarterly inflation report. RBNZ kept rates unchanged and NZD/USD plunged severely following the announcement.
BoE Stance Can Push GBP/USD Above 1.3000
The sterling has been virtually unchanged yesterday against most of the G10 currencies while traders are expecting “Super Thursday’ effect today. After the economic indicators for manufacturing and industrial production that will be released early in the morning, traders will be focused at the publication of the BoE minutes and the quarterly inflation report following the central bank’s interest rate decision. Market consensus is for the policymakers to vote to keep the bank rate at 0.25%, with the same voting pattern as last time of 8-1-0, with Kristin Forbes voting for a rate hike. Traders will scrutinize all the available data that will have, to see if the central bank is on course to raise rates in this year.
Taking a look at the numbers, the economy has many areas of significant improvements since the last policy meeting on March 16. The headline inflation rate improved to 2.3% from 1.8% has been before. The annual GDP picked up to 2.1% from 2.0% before while all the PMIs, manufacturing, services and construction edged higher. On the other hand, Gfk consumer confidence and retail sales experienced a slight slowdown. If BoE emphasises to these improvements, we may see GBP/USD above 1.3000, running towards 1.3050.
Read the full article on JFD Research.