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British Pound Up Ahead of Bank of England Announcement - Neutral Stance Likely
Wednesday, 07 October 2009 21:16:17 GMT  |  Terri Belkas, Currency Strategist
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The British pound made headway against many of the majors on Wednesday, as GBPJPY tested and then reversed from 140 once again. There was no UK data on hand, but the British pound will face event risk on Thursday from the Bank of England’s (BOE) latest rate decision. The BOE is anticipated to announce at 7:00 ET that they’ve left their Bank Rate unchanged at 0.50 percent, but this won’t even be the market-moving part of the announcement. Instead, traders will be looking toward the BOE’s policy statement. This has consistently been the prime “news event” of recent rate decisions. Last month, the BOE indicated a neutral stance as they stated they would continue their £175 billion quantitative easing program, and this ultimately led the British pound to rally against the US dollar and euro immediately. A repeat of this statement is likely to trigger a similar reaction from the British pound, but on the other hand, any indication that the program may need to be expanded down the line would weigh very heavily on the currency.

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