The Bank of England will announce its latest monetary policy decision around midday today. Expectations for an interest rate hike have decreased in recent days, however, a hike is still possible.
Sterling could strengthen or weaken following the meeting, depending on whether interest rates are raised or not, and the outcome could determine the pound’s movements for the rest of this year.
The dollar is slightly stronger this morning following the conclusion of the Federal Reserve’s meeting yesterday. It was announced that the large bond-buying program will be tapered, as expected.
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GBP: All eyes on BoE meeting
All eyes will be on the Bank of England’s monetary policy meeting today. The pound has moved lower this week as expectations for an interest rate hike have decreased.
However, it’s still possible that a hike could be announced, so the markets will be listening closely for this. A decision to raise interest rates may caused the pound to strengthen, whilst avoiding a hike could cause sterling to weaken.
Many experts are torn on whether an interest rate hike will occur this month or next.
GBP/USD chart over past year
EUR: PMI figures expected today
The euro strengthened slightly against the dollar yesterday evening following the Federal Reserve’s announcement yesterday. It is also still stronger against the pound.
Factory orders for Germany came in this morning, showing an increase of 1.3% month-on-month in September.
Later today, PMI figures will be released for Germany and the Eurozone, showing how these economies performed in October.
USD: Fed announce tapering
The dollar is stronger against a basket of currencies this morning after weakening initially following the Federal Reserve’s monetary policy announcement.
The Fed announced that it would taper its huge $120 billion monthly bond-buying program by $15 billion initially, as widely expected. However, Fed Chair, Jerome Powell, said that they would be ‘patient’ on deciding to raise interest rates.
Balance of trade figures will be released for the US today, followed by Non-Farm Payrolls tomorrow.