When
Thursday 30 January at 12 noon (rate decision) & 12:30 (press conference)
The BoE will give its first monetary policy decision of the year and of the decade on Thursday. This will also be the last rate decision prior to Brexit and the last meeting with Mark Carney at the helm. So, will the BoE use this moment for a big announcement, or will they opt to stay in wait-and-see mode?
Swap markets are currently pricing in a 50 /50 chance of a rate cut, this has come down from 70% at the beginning of last week, making it one of the closest interest-rate decisions that we have seen in recent years.
Data
retail saleshouse priceemployment figuresBrexit Uncertainty
There is a very good chance that business and consumer optimism could start falling again as the reality of UK – EU trade negotiations hit. The UK and EU have a very short time frame within which to complete complex negotiations. The chances of success are questionable. A hard Brexit is firmly back on the table as an option, which as we saw in 2019, could drag heavily on the economy. Business investment is unlikely to pick up with uncertainty still high.
Votes
EUR/GBP Levels To Watch
As a rate cut is only 50% priced in, a move to ease policy could see the pound drop sharply.
EUR/GBP has trade in a tight range on Wednesday, indicating that traders are cautious ahead of tomorrow announcement. The pair is currently flat on the day. It has just slipped through its 50 sma on 4-hour chart and remains firmly below 100 and 200 sma. The 50 sma is now acing as immediate resistance. A break back above the 50 sma could open the door to 0.8497 (22 Jan. high) prior to 0.8553 (high 20 Jan.)
Support can be seen at 0.8407 (low 27 Jan.) prior to 0.8385 (low 24 Jan.).