The meeting of the Bank of England today should be a determining factor in the market, says Chris Turner, FX Analyst of ING.
The GBP/USD can be distorted by the feeling of global risk today
“While a rate of 25 basic points up to 4.25%is widely expected, which is probably the most important area today is what the BOE does with this phrase: ‘Based on the evolutionary vision of the Committee on the medium -term inflation perspectives, a gradual and careful approach to the additional withdrawal of the restriction of monetary policy is appropriate.”
“Those most moderate in the market are looking for this ‘gradual and careful’ phrase to be eliminated/modified to indicate a more acute set of boose rates cuts. The BOE is ready to eliminate that phrase yet. Since the market is now assessing four cuts of 25 basic points this year and we wait three (May, August, November), if the relief of the boe remains ‘gradual and careful’ recover. ”
“For reference, the FX option market values ​​a equilibrium range of USD 80 pips for the GBP/USD during the next day. And for the EUR/GBP, that balance is 39 pips GBP. The GBP/USD could be distorted by the feeling of global risk today, but we would say that a less moderate boe than expected today could lead to the EUR/GB to the EUR/GB to the area of 0.8435/40. “
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.
