Should investors be on alert for pound movements following the BOE’s expected 0.25% rate hike?

Should investors be on the lookout for how the pound reacts to the BOE’s expected 0.25% rate hike?

21.09.2023

In yesterday’s U.S. currency trading, the dollar strengthened against the euro following the press conference, as Fed Chair Powell responded with his usual standard remarks at the FOMC meeting, stating, “We remain strongly committed to achieving our 2% inflation target.” The EUR/USD pair hit a high of 1.0736 before pulling back, falling to 1.0658.As the pair has fallen to 1.0617 during today’s Asian session, we should remain vigilant for further euro weakness during the European session.

Ahead of today’s BOE interest rate announcement, the pound traded in a narrow range against the yen. GBP/JPY rose from 182.452 to 183.345 but failed to maintain its strength during U.S. trading hours and fell.During today’s Asian session, the pair has fallen to 182.381. GBP/JPY has been trading in a narrow range below the 20-day moving average (MA) since the start of the month, but with the 75-day MA acting as support in the 181-yen range, we will be watching closely to see if it rebounds at that level.

Today’s schedule includes UK public sector net debt at 3:00 PM, French business sentiment at 3:45 PM, Turkish consumer confidence at 4:00 PM, the SNB policy rate and statement at 4:30 PM, and at 8:00 PM, the UKBOC policy rate and statement, and Turkey’s TCMB policy rate and statement at 8:00 PM; U.S. initial jobless claims, U.S. current account balance, and U.S. Philadelphia Fed Business Outlook Index at 9:30 PM; U.S. existing home sales and U.S. leading economic index at 11:00 PM; and remarks by ECB President Lagarde and the Eurozone consumer confidence index.We should remain highly vigilant regarding the pound’s price movements, given expectations of a 0.25% rate hike by the BOE.