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British Pound Unlikely to Find Fuel in Bank of England Rate Decision

British Pound Unlikely to Find Fuel in Bank of England Rate Decision

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • British Pound May Not Find Fuel in Bank of England Policy Announcement
  • Yen Declines, Aussie and NZ Dollars Gain as Risk Appetite Swells Overnight
  • See Economic Releases Directly on Your Charts with the DailyFX News App

A monetary policy announcement from the Bank of England headlines the economic calendar in European trading hours. While UK economic news-flow has cautiously improved since December’s sit-down, the outlook is not so robust as to expect the hawks to build the voting majority needed to produce a hike. Indeed, futures pricing implies the first increase in the benchmark lending rate will not arrive until the fourth quarter. The BOE typically doesn’t publish a statement when policy is left unchanged, so today’s announcement will probably amount to a non-event for the British Pound.

The safety-linked Japanese Yen slumped while the sentiment-geared Australian and New Zealand Dollars staged an impressive advance in overnight trade as risk appetite firmed. The MSCI Asia Pacific regional benchmark stock index rose 1.2 percent. The move appeared to follow on from a recovery on Wall Street, where the S&P 500 snapped a losing streak to produce the largest advance in three weeks. The move higher appeared corrective following five days consecutive down days rather than inspired by minutes from December’s FOMC meeting or an upbeat set of economic data outcomes, as the newswires suggested.

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Asia Session

GMTCCYEVENTACTEXPPREV
0:30AUDBuilding Approvals (MoM) (NOV)7.5%-3.0%11.5%
0:30AUDBuilding Approvals (YoY) (NOV)10.1%1.2%2.1%
2:00JPYTokyo Avg Office Vacancies (%) (DEC)5.47-5.55
5:30AUDForeign Reserves (A$) (DEC)65.7B-61.7B

European Session

GMTCCYEVENTEXP/ACTPREVIMPACT
7:00EURGerman Factory Orders n.s.a. (YoY) (NOV)-0.4% (A)2.4%Medium
7:00EURGerman Factory Orders s.a. (MoM) (NOV)-2.4% (A)2.5%Medium
8:00GBPHalifax House Prices s.a. (MoM) (DEC)0.3%0.4%Low
8:00GBPHalifax House Price (3M/Y) (DEC)7.6%8.2%Low
10:00EUREurozone PPI (MoM) (NOV)-0.1%-0.4%Low
10:00EUREurozone PPI (YoY) (NOV)-1.4%-1.3%Low
10:00EUREurozone Retail Sales (MoM) (NOV)0.2%0.4%Medium
10:00EUREurozone Retail Sales (YoY) (NOV)0.2%1.4%Medium
10:00EUREurozone Industrial Confidence (DEC)-4.0-4.3Low
10:00EUREurozone Business Climate Indicator (DEC)0.170.18Low
10:00EUREurozone Services Confidence (DEC)4.64.4Low
10:00EUREurozone Economic Confidence (DEC)101.2100.8Low
10:00EUREurozone Consumer Confidence (DEC F)-10.9-10.9Medium
12:00GBPBOE Asset Purchase Target375B375BHigh
12:00GBPBank of England Rate Decision0.50%0.50%High

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.16561.17511.17951.18461.18901.19411.2036
GBPUSD1.49051.50061.50581.51071.51591.52081.5309

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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