Bank of England rate decision preview: What to expect of GBP/USD?

By FXStreet FXStreet (Mumbai) – The GBP/USD pair is trading largely unchanged on the day around 1.5180 following a 180 pip rally on Wednesday. The immediate focus is now on the Bank of England (BOE) rate decision and minutes release.

Low inflation – a well known fact

The BOE monetary policy committee (MPC) is expected to vote 8-1 to keep rates unchanged. The traders would be interested to see how policymakers see cost pressures unfolding in the days ahead. The minutes could reiterate prospects of low inflation in the short-term on account of lower oil and commodity prices.

Minutes may comment on job losses in the mining sector and worsening trade deficit

Comments on the labor market are likely to be positive, with a slight chance of policymakers expressing concerns regarding future job losses on account of a sharp slowdown in the mining sector. The mining heavyweights like Anglo American announced job cuts yesterday.The situation may worsen if commodity rout continues and the minutes could take a note of the same. Meanwhile, comments on the worsening UK trade deficit could hurt GBP as well.

Overall, the minutes could carry a dovish tone, but if the vote count changes to 7-2, Sterling would spike …read more

Source:: FX Street