The British monthly GDP is announced on Friday at 09:00 MT time.
Can the GBP rise on the BOE policy?
BOE Governor Bailey speaks on Thursday at 17:00 MT time.
Instruments to trade: EUR/GBP, GBP/USD, GBP/CAD, GBP/CHF
The Bank of England has been keeping the rate steady at 0.1% after it was reduced twice in March to respond to the virus damage. The policymakers expressed their commitment to support the economy and maintain a possibly favorable financial climate in the UK. The latter has been fortified by an extensive policy of quantitative easing the Bank has been implementing until now. Nevertheless, the domestic economic layout in the UK remains considerably dire. Coupled with the likelihood of a no-deal Brexit, the coming weeks promise to be one of the toughest challenges for the GBP. We will be looking into the message provided by the Bank of England about the economic outlook and see if these manage to improve the position of the GBP.
- If the bank’s message is optimistic, the GBP will rise.
- If the bank’s message is not very optimistic, the GBP will drop.
The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
The US unemployment claims are out on Thursday at 15:30 MT time.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.