When is the BOE rate decision and how could it affect GBP/USD?

BOE monetary policy decision - Overview

Markets are buckling up for the ‘Super Thursday’, with the Bank of England’s (BOE) and European Central Bank (ECB) monetary policy announcements likely to garner a lot of attention in Europe.

At Its monetary policy meeting today, the BOE will announce its interest rate decision and release the minutes of the meeting at 1100 GMT. The September meeting does not have the post-policy press conference held by Governor Carney.

The rate hike announcement is likely to have limited impact on the pound, as the British central bank is likely to keep the benchmark interest rates unchanged at 0.75% after it hiked the rates for the second time since the global financial crisis (GFC) last month. The voting composition is likely to stay 9-0 in favor of the status-quo.

Meanwhile, the tone or language of the monetary policy statement will be closely eyed for fresh insights on the bank’s policy outlook. Traders will also watch out for any changes in the voting pattern, in the wake of looming Brexit uncertainty and stronger wages and inflation data.

However, FXStreet’s Editor-in-Chief, Mario Blascak, PHD argues, “even with inflation and wages picking up slightly in recent reports, the data are seen not enough to alter the expectations of the unanimous voting pattern for both the Bank rate vote and asset purchasing vote. FX traders should see breaking this pattern in members voting for a rate hike as Sterling positive.”

How could it affect GBP/USD?

Slobodan Drvenica at Windsor Brokers Ltd notes: “Double long-legged Doji candles in past two days warn that bulls might be running out of steam as recent rally faces strong headwinds from falling and widening daily cloud (cloud base lays at 1.3060 today). Daily slow stochastic is reversing from the overbought territory and creating bear-cross and 14-d momentum is turning lower, adding to negative signals.”

“On the other side, daily MA's are in bullish setup and formed multiple bull-crosses, along with repeated close above 55SMA, offsetting stronger negative impact for now. Daily 55SMA marks initial support at 1.3012 and sustained break lower would generate initial negative signal, with extension and close below 10SMA (1.2957) to signal reversal. Conversely, penetration into daily cloud will be positive signal, with confirmation of bullish continuation seen on break above cloud top (1.3162) reinforced by Fibo 61.8% of 1.3472/1.2661 descend,” Slobodan adds.

Key Notes: 

GBP/USD Forecast: Sterling in upward trend ahead of BoE with Brexit headlines pushing it higher

BoE: MPC to keep the prospects of a few 2019 and 2020 rate hikes in play - Rabobank

No surprises expected today at the BoE, ECB events – Danske Bank

About the BOE interest rate decision

BOE Interest Rate Decision is announced by the Bank of England. If the BoE is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the GBP. Likewise, if the BoE has a dovish view on the UK economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.