Bank of England Preview.
The Bank of England will meet today and set monetary policy.
interest rates will certainly be unchanged at 0.10%.
However, it is the BoE’s 875 billion bond-buying programs, that is the real interest today. Some forecasters are calling for a cut in the buying to be signaled today.
This would send the GBPUSD over 1.4000.
However, most economists are cautious as the BoE may need to see more strong data to justify this move, despite knowing the data will come.
Even if the BoE just acknowledges the coming strength in the UK economy, traders will take things into their own hands, by buying the GBP and not wait for the BoE’s signal to taper.
The downside to the GBP ahead of the BoE may be limited. On the optimistic view of the UK economy after the success of the UK Governments vaccine rollout.
However, the road ahead for the GBP may get a little bumpy, as today there are regional elections including the Scottish Parliament.
If the ruling SNP get a clear majority, you can be sure that they will demand a second referendum on independence from the UK.
A GBP negative, although the UK Government is under no obligation to grant a referendum.
The election results won’t be released until Saturday, this could cause some strong headlines in the Sunday press ahead of the market opening on Monday.