GBP/USD Vulnerable To Further Losses On 7 To 2 BoE Split

Video length:00:31:45

Bank of England (BoE) to Keep Benchmark Interest Rate at Record-Low of 0.25%.

- BoE Minutes May Reveal 7 to 2 Split as Sir David Ramsden Joins Monetary Policy Committee (MPC).

Trading the NewsBank of England (BoE) Interest Rate Decision

BoE Rate Decision

The Bank of England (BoE) interest rate decision may undermine the near-term advance in GBP/USD should a greater number of central bank officials endorse a wait-and-see approach for monetary policy.

The BoE Minutes may reveal a 7 to 2 split to retain the current policy as Sir David Ramsden joins the MPC, and a growing majority to preserve the accommodative stance may trigger a bearish reaction in the British Pound as it drags on interest-rate expectations. On the other hand, a 6 to 3 split may generate a more bullish scenario for GBP/USD as BoE officials show a greater willingness to move away from the easing-cycle.

Impact that the BoE rate decision has had on GBP/USD during the previous meeting

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

AUG

2017

08/03/2017 11:00:00 GMT

0.25%

0.25%

-97

-98

August 2017 Bank of England (BoE) Interest Rate Decision

GBP/USD 5-Minute

GBP/USD Chart

The Bank of England (BoE) voted 6 to 2 to preserve the record-low interest rate, with Ian McCafferty and Michael Saunders pushing for a 25bp rate-hike as ‘the withdrawal of part of the stimulus that the Committee had injected in August last year would help to moderate the inflation overshoot while leaving monetary policy very supportive.’ Nevertheless, it seems as though the BoE remains in no rush to lift the benchmark interest rate as ‘GDP growth had been sluggish and was expected to remain so in the near term,’ and the central bank may carry the wait-and-see approach into 2018 as Brexit clouds the economic outlook with high uncertainty. The British Pound sold off amid the growing majority to retain the current policy, with GBP/USD slipping below the 1.3200 handle to end the day at 1.3137.

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