Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
How may the BOE move the GBP?
The Bank of England will have the monetary policy meeting today at 14:00 MT time. Analysts expect the interest rate to remain unchanged at 0.75%, but there will be some more interesting things to follow during the event.
Hints on future easing
The Bank of England meeting is usually followed by the official votes of the Monetary Policy Committee members. Last time, two of them: Michael Saunders and Jonathan Haskel called for lower interest rates. This time analysts expect them to repeat their moves. Some of them even predict the third member: Gertjan Vlieghe to turn dovish, too.
Now, after the election is over and the UK Prime Minister Boris Johnson threatens to change the law to stop the extension of the Brexit transition phase, some of the analytical banks start to expect the BOE to cut rates in January. According to Bloomberg, traders already price in the rate cuts through the next year.
It is worth mentioning the weak economic data of Great Britain. You can read the detailed analysis of the economic situation in Great Britain and the long-term forecasts for the GBP here.
What does the BOE governor say?
The meeting will be also important for the comments by the BOE Governor Mark Carney. Earlier this week he noted that the possibility of a no-deal Brexit increased due to the Tories victory. He also warned traders to prepare for a “high-level update” on the economy today. So, prepare your nerves. Let’s not forget that Mr. Carney is due to leave the post of the governor on January 31, and his last meeting may be full of surprises.
What about GBP/USD?
After testing the support at 1.3050 on the daily chart, which lies close to the border of the ascending trendline, the pair is preparing for its further move. If the GBP gets stronger today, the pair will likely retest the 1.3175 level. The next key level for bulls will lie at 1.3260. Bearish scenario may happen ifs the pair breaks below the uptrend and the 1.3050 level. After that, the next key level in the focus of bears will be placed at the psychological point of 1.3.
Have a look at the key financial instruments on Monday, February 28. Geopolitics is currently on all news frontlines. Western nations escalated sanctions on Russia for the invasion of Ukraine.
The United States will publish the Initial Jobless Claims on Thursday, December 30, at 15:30 GMT+2 (MetaTrader time).
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Every week we expect many interesting events that can shake the market.