UK Preliminary Quarterly GDP is out on Thursday at 09:00 MT time.
BOE rate cut: what's next for the GBP?
Today, the Bank of England made an emergency cut of its interest rate. The regulator shifted the interest rate by 50 basis points to 0.25%. The action was driven by a slowdown of the British GDP growth for January (0% vs. 0.2% expected) and the global uncertainties amid the coronavirus outbreak.
UK GDP growth rate
Source: Trading economics
But there is some optimistic news as well. During the press conference, the BOE governor acknowledged the economic shock caused by the virus, but, at the same time, expressed confidence about its temporary effect. Thus, the weakness of the GBP was short-lived, as bulls took over the market on the Mr. Carney’s beliefs.
Even though GBP/USD plunged below the 1.2864 level, buyers managed to push it higher and help it to retest the 1.2977 level.
If you’re the GBP trader there is no time to relax today. The upcoming UK budget update at 14:30 MT time will contain stimulus measures, which are expected to support the economy and businesses. Follow the updates, as they may have an impact on the GBP.
Time to trade on the GBP?
The market presents a wide range of opportunities today. Besides GBP/USD, take a look at the EUR/GBP. This pair may be a good choice for those who don’t want to deal with the USD volatility expected on the US inflation release at 14:30 MT time.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!