Watch for any potential weakening of the pound following the BOE’s policy rate announcement

Watch for any potential weakening of the pound following the BOE’s policy rate announcement

06.02.2025

In yesterday’s U.S. currency trading, the U.S. dollar rose against the euro. The EUR/USD pair traded between 1.0370 and 1.0442. The price broke above the upper resistance zone formed by the 200-period SMA on the hourly chart with a real body candle.On the 4-hour chart, the price has extended to the +2σ level of the Bollinger Bands, and on the daily chart, it has risen for three consecutive days. We will be watching price movements during European trading hours to see if the U.S. dollar faces resistance and begins to decline.

Among European currencies, the pound fell against the yen ahead of today’s Bank of England (BOE) policy rate announcement. The GBP/JPY pair fell from 192.765 to 190.296, with the decline tracking the 20-period moving average (MA) on the hourly chart.On the 4-hour chart, the pair has pulled back after being capped by the 200-period EMA. Since the daily chart shows a similar price movement to the 4-hour chart, we will be closely monitoring whether the pound weakens further following the policy rate announcement.

Today’s schedule includes South Korea’s current account balance at 8:00, Japan’s foreign and domestic securities investment at 8:50, Australia’s trade balance at 9:30, the Philippines’ unemployment rate at 10:00, Switzerland’s employment statistics at 15:45,at 4:00 p.m., Germany’s new manufacturing orders; at 4:00 p.m., Sweden’s Consumer Price Index; at 6:30 p.m., the UK’s Construction PMI; at 7:00 p.m., Eurozone retail sales; at 9:00 p.m., the UK’sBOE policy rate and statement, 9:30 PM: U.S. Challenger Layoffs and BOE Governor Bailey’s press conference, 10:30 PM: U.S. Initial Jobless Claims and U.S. Nonfarm Productivity Index, and 12:00 AM: Canada’s Ivey PMI.We’ll be watching closely to see if the pound weakens following the BOE’s policy rate announcement and to monitor price movements after the release of these economic indicators.