GBP Analysis

June 24 2021

Photo by Alaur Rahman on Pexels.com

Will the Bank of England spring a surprise like the US Federal Reserve?
With the jump in the US Dollar after the Fed, Traders are focusing on the outcome of the Bank of England policy meeting today.
The Pound has been strong this week. This strength gives the impression that the risk is to the upside.

The BoE’s Chief Economist, Andy Haldane, has probably been the most hawkish of the MPC. He has called for a reduction in QE. However, today is his last MPC meeting as he is leaving the Bank after a 30-year career.

I would be surprised if he didn’t vote to cut QE right away. Will Haldane be able to persuade any of his colleagues to join him?

The last print of UK inflation headlined at 2.1%, marginally above the 2% target. If the UK economy is growing as much as people think, then inflation could become a problem. The BoE may have to raise interest rates sooner rather than later.

Of course, this argument will be undone. If the BoE come up with the Federal Reserve line that inflation is just transitory.

Today’s meeting will likely define the near term direction of the GBP

GBP Technical Outlook

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Published by Neil Callard

Forex Trader and Educator. 30 years trading experience, of which 20 years was market making in major currencies in large international financial institutions.

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