Market participants may be on the lookout for how the pound reacts to the BOE’s policy rate announcement

Market participants may be on the lookout for how the pound reacts to the BOE's policy rate announcement

22.09.2022

In the previous day’s U.S. currency trading, the dollar strengthened following the Federal Open Market Committee’s (FOMC) decision to raise interest rates for the third consecutive meeting. The EUR/USD pair fell by approximately 160 pips from 0.9974 to 0.9813. It continued to decline during today’s Asian trading session, hitting a new low for the year. It is currently trading around 0.9808, and since a “perfect order” is maintained across moving averages on the daily chart and above, we should remain cautious of further declines.

Among European currencies, the pound fell against the U.S. dollar ahead of today’s policy rate announcement, but rose against the yen. The GBP/JPY pair rose by approximately 180 pips from 161.402 to 163.236, rebounding from the lower boundary of its daily uptrend line.A 50-basis-point rate hike is expected in today’s BOE policy rate announcement, but we will closely monitor price movements following the announcement to see if the increase matches market expectations.

Today’s schedule includes a press conference by Bank of Japan Governor Kuroda at 3:30 p.m., Turkey’s Consumer Confidence Index at 4:00 p.m., the Swiss National Bank’s (SNB) policy rate decision and statement at 4:30 p.m., a press conference by SNB Governor Jordan at 5:00 p.m., the ECB’s Monthly Report, and at 8:00 p.m., the UK’sthe Bank of England (BOE) policy rate and statement, and the Turkish Central Bank (TCMB) policy rate and statement; at 9:30 PM, U.S. initial jobless claims and the U.S. second-quarter current account balance; at 11:00 PM, the U.S. leading economic index; at 11:30 PM, U.S. weekly natural gas inventories; and at midnight, the U.S. Kansas City Fed Manufacturing Activity Index.We should be on the lookout for pound price movements following the BOE policy rate announcement.