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EUR/GBP Signal - BoE Meeting - 16 Mar 2017

Signal details
Entry Price: 
0.8735
Close Price: 
0.8707
Direction: 
High
Expiry Time: 
21:00 GMT
Result: 
OTM
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The Bank of England's monetary policy meeting is scheduled for later today at 1200 GMT. The central bank is expected to keep interest rates unchanged at 0.25% and leaving the asset purchases unchanged. The central bank's sitting on the sidelines comes amid the potential economic challenges that lay ahead for the UK as the Brexit negotiations are expected to being.

This however has made quite a few policy makers at the Bank of England uncomfortably with inflation already soaring to the 2.0% inflation target rate. The central bank had previously ruled out making any changes to monetary policy even if it means having to tolerate higher inflation.

At today's Bank of England monetary policy meeting, the central bank can be seen holding interest rates steady. There is a strong scope for the BoE to strike a dovish tone following weak wage growth data released earlier this week. The central bank had noted that slower wage growth against higher increase inflation could cause potential headwinds for a slowdown in the economy.

EURGBP has been volatile over the past week as the currency has been hit by both politics and the economy. Earlier this week news reports emerged that the Scottish National Party was planning to hold another independence referendum in 2018. The news was however not confirmed by the British PM Theresa May. Meanwhile economic data and politics are starting to look more positive from the Eurozone.

EURGBP is seen posting gains after prices turned volatile yesterday. EURGBP initially plunged to daily lows of 0.8667, marking a 4-day low before recovering to close the day on a bullish note. Watch for near term volatility to push EURGBP towards 0.8735 following which daily CALL options can be purchased. The Bank of England is likely to maintain a dovish tone at today's meeting, despite rising inflation.

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. He has no business nor personal relationships with any mentioned government entities or stocks. 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.