Fundamental Analysis: Interest Rate Decision
The Bank of England (BOE) decision on short term interest rate is due to be published tomorrow (Jan 7). The decision on where to set interest rates depends mostly on growth outlook and inflation. The primary objective of the central bank is to achieve price stability. High interest rates attract foreigners looking for the best “risk-free” return on their money, which can dramatically increases demand for the nation’s currency.
A higher than expected rate is positive/bullish for the GBP, while a lower than expected rate is negative/bearish for the GBP.
Analysts predict that the rate will remain at 0.50%.
(the above analysis via Forexpros)
Though the rate is expected to remain steady, traders will be looking for sentiment regarding the BoE’s quantitative easing (QE) policy. Any signs of exiting QE will be bullish for the GBP while any signs of prolonging or even extending the QE policy will be quite GBP negative.
(view comments)
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faithmight reblogged this from fmfx and added:
I fully expect BoE minutes...dovish - kinda like what we saw from FOMC - and the market...
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fmfx posted this
