Main Market Trends on September 23
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BOE meeting will influence the GBP
What will happen?
The Bank of England will release its statement and announce its monetary policy decision on June 24 at 14:00 MT. Last time, the Bank of England kept its monetary policy unchanged, and slowed down the pace of asset purchases, indicating it is on the way to end emergency support later this year. Besides, the central bank lifted the 2021 GDP forecast to 7.25 % from the previous 5 % growth.
However, the UK delayed the lockdown easing, and this fact can negatively influence both the consumer and business confidence. Beyond the virus problem, the British economy has another headwind: EU-UK trade tensions centered on Northern Ireland. Thus, the central bank may avoid any hawkish moves this time.
How to trade on the BOE meeting?
The market reaction depends on the Bank of England’s economic outlook. If the Bank of England gives positive projections on the UK economy and/or hints soon policy tightening, the GBP will strengthen. If the central bank expresses some concerns, the GBP will weaken.
- If the BOE is optimistic, the GBP will rise.
- If the BOE is uncertain or cautious, the GBP will drop.
Instruments to trade: GBP/USD, GBP/JPY, EUR/GBP
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