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EUR/GBP binary signal - BoE Monetary Policy Decision - 02 Nov 2017

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21:00 GMT
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The Bank of England will be meeting today at 12:00 GMT for its monthly monetary policy meeting. This comes after the BoE held its last meeting in September where it signaled that interest rates could rise in the short term.

According to the economists polled, the Bank of England is widely expected to hike interest rates at today's meeting. This will see the UK's interest rates rise from the current 0.25% to 0.50%, thus a quarter basis point increase in the interest rates. The BoE's rate hike today will be the first rate hike in a decade.

Although the rate hike might seem bullish or hawkish for the markets, the BoE is expected to take a dovish stand. Most likely, today's rate hike will be interpreted as removal of the easy monetary policy that was implemented following the Brexit referendum in June last year.

The Bank of England had cut interest rates a few months after June 2016 in an effort to keep the economy going. With inflation now standing at 3% and above the Bank of England's inflation target of 2%, today's rate hike is expected to push inflation lower.

With the British pound now consolidating the effects of higher inflation is expected to wear off in the coming months. Economists are expecting that after today's rate hike, the Bank of England officials will hold rates steady into most of next year.

The BoE's Carney has suggested that this is due to the uncertainty from the Brexit deal. No major compromise has been reached which has increased the risks of a hard Brexit. As a result of this uncertainty, the UK's economy is expected to move at a slower pace.

Today's binary options signal is EURGBP, the currency pair fell to a 5-month low yesterday before recovering later in the day. With price at support we expect the short term bias to turn to the upside. Therefore, we would purchase daily CALL options at 0.8765 for a 21:00 GMT expiry time as we expect to see the EURGBP close higher on the day.

binary options signal eurgbp 02 Nov 2017

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.