British Pound (GBP) Latest: Bank of England to Set Path for GBP/USD, EUR/GBP
GBP price, Brexit news and analysis:
- The Bank of England is expected to keep all its monetary settings unchanged Thursday but there could be a hint of more stimulus to come – potentially weakening GBP.
- Elsewhere, the war of words between the UK and the EU on their future relationship persists as Boris Johnson continues to try to push his Internal Market Bill through the UK Parliament.
GBP/USD Outlook Dependent on Bank of England
The key risk event for Sterling traders this session will be the latest announcement from the Bank of England’s monetary policy committee, due at midday local time. The UK central bank is all but certain to keep interest rates and its bond-buying program unchanged but any hint of more stimulus to come would likely strengthen EUR/GBP and weaken GBP/USD.
GBP/USD Price Chart, Two-Hour Timeframe (September 1-17, 2020)
Chart by IG (You can click on it for a larger image)
However, as the two-hour chart above shows, there is support for GBP/USD just below 1.28 so any decline could stall at that level despite an uptick in USD after the Federal Reserve said Wednesday that it would keep US interest rates near zero until 2023 but decided not to boost its stimulus program.
Post-Brexit trade deals in focus
Elsewhere, the war of words between the UK and the EU on their post-Brexit relationship continues, with European Commission President Ursula von der Leyen saying the chances of a UK-EU trade deal are fading. US Democratic Party Presidential Candidate Joe Biden has also warned the UK that it must honor the Northern Ireland peace deal or there will no UK-US trade agreement.
Biden was referring to the Internal Market Bill currently wending its way through the Westminster Parliament, a Bill that would break parts of the Brexit divorce treaty relating to the border between Northern Ireland and the Irish republic.
UK Prime Minister Boris Johnson seems to have placated rebels in his ruling Conservative Party but the Bill still faces possible amendments by dissenters and will likely struggle to pass through the House of Lords, although the Lords have no power to block it.
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--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.