- Pound falls across market ahead of BoE, EUR/GBP tops 0.8900.
- Bank of England would raise interest rates by 50 basis points.
- European Central Bank also aims to rise above 50 points.
EUR/GBP broke above 0.8900 for the first time since late September on Thursday, ahead of the decisions of the European Central Bank (ECB) and the bank of england (BoE). The pound is one of the weakest in the G10, which is driving the cross.
At 12:00 GMT, the BoE will announce its monetary policy decision. The reference interest rate is expected to go from 3.5% to 4%. Voting is expected to be split, with more than one member voting against the raise. In turn, the outlook for the central bank forward.
The underlying problem is the expectation of poor economic performance. If the BoE wants to continue raising rates after this meeting, it would further affect possible deterioration, which may not be so positive for the pound.
Just over an hour later, at 13:15 GMT, the ECB would announce a rise of 50 basis points. In the subsequent press conference, if officials continue with the same recent line, it would point to a continuation of the bullish cycle, leaving the doors wide open for another 50-point rise.
The divergence in the economic outlook and the pace of monetary tightening, is supporting EUR/GBP. The cross reached as high as 0.8920 on Thursday, the highest in four months. The price remains above 0.8900, rising for the fourth day in a row and cutting, for the moment, weeks of sideways trading.
High volatility is expected in the coming hours, both upward and downward. Once the events are over, if confirmed above 0.8900, the euro would be on its way to 0.9000. While below 0.8850, it would leave the pound back in the previous range.
|Today’s last price||0.891|
|Today Daily Change||0.0030|
|Today Daily Change %||0.34|
|Today daily open||0.888|
|Previous Daily High||0.8883|
|Previous Daily Low||0.881|
|Previous Weekly High||0.8852|
|Previous Weekly Low||0.8754|
|Previous Monthly High||0.8897|
|Previous Monthly Low||0.8722|
|Daily Fibonacci 38.2%||0.8855|
|Daily Fibonacci 61.8%||0.8838|
|Daily Pivot Point S1||0.8833|
|Daily Pivot Point S2||0.8785|
|Daily Pivot Point S3||0.876|
|Daily Pivot Point R1||0.8905|
|Daily Pivot Point R2||0.893|
|Daily Pivot Point R3||0.8977|
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.