Pound Lower Ahead of BoE

Tuesday, 8 May 2018 10:26

By: DailyForex.com

The Pound Sterling edged lower ahead of this week’s policy meeting of the Bank of England. While analysts and economists are generally forecasting that the central bank will maintain the status quo as regards interest rates, investors are concerned that the Brexit negotiations could have a less than favorable outcome and thus have trimmed their holdings in the Pound. Until recently, there had been high expectations that the central bank would be tightening its monetary policy but data which showed a softer than expected economy has changed sentiment.

As reported at 11:08 am (BST) in London, the GBP/USD was trading at $1.35, down 0.25%; the pair earlier hit a trough of $1.3496 while the high for the session is at $1.3593. The EUR/GBP is trading at 0.87864 Pence, down 0.09301%; the pair has ranged from a session trough of 0.87662 Pence to a peak of 0.88100 Pence.

BoE Rate Hike Chances Slim

The Bank of England will be making its interest rate and policy decision on Thursday, followed by a summary report and the quarterly inflation report. David Carney, the Bank of England governor, will close out the proceedings with a speech outlining the Monetary Policy Committee’s thought process. Analysts are predicting that seven members of the MPC will vote to keep policy unchanged while two are likely to vote in favor of a rate hike. Up until a month ago, data shows that there was close to a 90% chance that a rate hike would be pushed through but that has since fallen to around a 10% probability.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.

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