Watch for any softening in the pound following the BOE policy rate announcement

Watch for any softening in the pound following the BOE policy rate announcement

06.02.2025

In yesterday's U.S. currency markets, the U.S. dollar rose against the euro.The EUR/USD pair traded between 1.0370 and 1.0442. It broke above the upper resistance zone of the 200-period simple moving average (SMA) on the hourly chart. 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 US dollar faces resistance and begins to decline.

European currencies saw the pound fall against the yen ahead of today’s Bank of England policy rate announcement. The GBP/JPY pair fell from 192.765 to 190.296. The decline followed the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the pair has pulled back after hitting resistance at the 200-period exponential moving average (EMA). Since the daily chart shows a similar price action to the 4-hour chart, we will be watching closely to see if 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, Germany’s new manufacturing orders at 16:00, Sweden’s consumer price index at 16:00, and the UK’sConstruction PMI, 7:00 PM: Eurozone Retail Sales, 9:00 PM: UK BOE Policy Rate and Statement, 9:30 PM: US Challenger Layoffs and BOE Governor Bailey’s press conference, 10:30 PM: US Initial Jobless Claims and US Nonfarm Productivity Index, and 12:00 AM: Canada Ivey PMI.We will need to watch for price movements following the release of these indicators to see if the pound weakens in response to the BOE’s interest rate announcement.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weak Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed