Don’t waste your time – keep track of how NFP affects the US dollar!

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Join the Facebook community of FBS!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Email tooltip

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

FBS Mobile Personal Area

FREE

View
Will BOE’s Super Thursday be super for the GBP?

Will BOE’s Super Thursday be super for the GBP?

Information is not investment advice

A Super Thursday is coming!  The Bank of England will hold a monthly meeting on Thursday, at 14:00 MT time.  Despite recent rumors on negative interest rates, analysts widely anticipate the regulator to leave its policy unchanged with the rate at 0.1% and the bond-buying scheme. The Bank is expected to publish the Monetary Policy Report additionally to the rate decision. This report will contain the economic outlook and projections for 2021.

Let’s analyze the main outlines of the meeting that may have an impact on the Forex pairs.

Negative interest rates

For sure, the most important thing we will focus on during the meeting is the update on negative interest rates. According to Mr. Bailey, interest rates would affect the struggling British economy and push lenders to increase mortgage costs in response. This news comes right before the meeting on Thursday, where the Old Lady plans to reveal the findings to assess the UK’s readiness for negative interest rates.   Here comes the main intrigue by the bank. If the review confirms a possibility of interest rates below zero, it may add pressure to the British pound. However, analysts doubt that the BOE would embrace this tool at least in the near-term.  

The economic outlook is on the agenda

Great Britain is surviving its third national lockdown amid a spread of a new Covid-19 strain. The unstable situation around coronavirus remains a big threat to the British economy. At the same time, successful vaccine rollout boosts risk sentiment and raises hopes in a rebound of economic conditions.  The UK has already vaccinated around 14% of the population, the third-highest in the world.

4454343.png

We expect the BOE to be cautiously optimistic here, as risks still exist.

Brexit

Whether we like it or not, the post-Brexit trauma may add uncertainties to the BOE’s outlook as well. The trade deal between the UK and the EU does not seem “ideal” for many analysts. Therefore, barriers to trade may limit the recovery.

To sum up, the addition of negative interest rates to the BOE's toolbox and uncertain outlook will pull the GBP down. Alternatively, a focus on optimistic improvements will strengthen the pound. 

Technical analysis

On H4, the cable managed to break below the lower border of an ascending trading channel. On Wednesday, the pair tried to recover the losses and tested the border by the higher shadow of the candlestick at around 1.3660. Bulls need to return within the channel to continue moving to the upside. In that case, the first obstacle on their way will lie at 1.37. The breakout of this level will increase the chance of a retest of the recent resistance of 1.3750. An alternative scenario would mean a strong bearish performance with a fall to 1.3610. The next support will lie at 1.3585.

GBPUSDH4.png

Don't forget that you can trade EUR/GBP, GBP/CAD, GBP/JPY, and other currency pairs! 

LOG IN

Similar

Microsoft: earnings report on July 27

What will happen?  Microsoft, the US IT company, will present its earnings report for the second quarter on July 27 after the stock market closes (23:00 GMT+3)…

Intel Reports Q2 Earnings Today

What will happen? Intel, the US IT company, will present its earnings report for the second quarter on July 22 after the stock market closes (23:00 GMT+3)…

Popular

Microsoft: earnings report on July 27

What will happen?  Microsoft, the US IT company, will present its earnings report for the second quarter on July 27 after the stock market closes (23:00 GMT+3)…

Choose your payment system

Learn more

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later