Sterling Trades Slightly Lower Ahead of BoE’s Interest Rate Decision, High Volatility Likely; Feb 03, 2022
U.K. BOE Interest Rate Decision
Today U.K. has scheduled to release Interest Rate Decision at 1200 GMT/1730 IST. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. MPC members vote on where to set the rate. The individual votes are published 2 weeks later in the MPC Meeting Minutes.
Traders are looking for the following answers from the BOE:
- Does BOE undertake 25 basis point hikes to 0.50?
- What will be the revised CPI and GDP targets?
- How many further rate hikes in a line for 2022?
- Expected Level of Unemployment Rate?
GBP movement will purely depend up on the Interest Rate hikes by BOE if any. Let’s watch out the tone of BoE Governor for conveying the Monetary Policy statement too.
Let’s see how GBP has reacted during the previous data release:
- The sterling trades slightly lower on Thursday and stabilizes around $1.3550 mark.
- Today pair made intraday high at $1.3575 and low at $1.3547 mark.
- A day chart is down and H1 chart with triple EMA suggests up trend for the time being.
- A sustained close above $1.3575 on H1 chart will check key resistances. Alternatively, a consistent close below $1.3540 will check further supports.
Take a look and do trade wisely!