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Should We Be Wary of Pound Volatility Following the BOE Policy Rate Announcement?

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Should We Be Wary of Pound Volatility Following the BOE Policy Rate Announcement?

07.08.2025

Today's Highlights
  1. Germany: Industrial Production
  2. UK: BOE Policy Rate and Statement Release

In yesterday’s U.S. currency trading, the U.S. dollar weakened against the euro. The EUR/USD pair rose from 1.1563 to 1.1667, forming an uptrend along the 20-period moving average (MA) on the hourly chart.On the 4-hour chart, the price has broken above the 200-period EMA—which had been acting as an upper resistance zone—with a real-body candle, and on the daily chart, the price has shifted from below the 20-period MA to above it. Given that the pair is continuing to rise during today’s Asian trading session, we will be watching for further weakness in the U.S. dollar during U.S. trading hours.

Ahead of today’s Bank of England (BOE) policy rate announcement, the pound rose against the U.S. dollar. The GBP/USD pair rose from 1.3281 to 1.3368. On the hourly chart, the price moved from the -2σ to the +3σ Bollinger Band.On the 4-hour chart, the upward trend along the 20-period moving average continues, and on the daily chart, the pair has risen for four consecutive days. The RSI has recovered from 30 to 44. While a 0.25% rate cut is expected in today’s BOE policy rate announcement, traders should pay close attention to price movements following the release of the data.

Today’s schedule includes Japan’s foreign and domestic securities investment data at 8:50, Australia’s trade balance at 10:30, New Zealand’s third-quarter 2-year inflation forecast at 12:00, Japan’s Economic Sentiment Index at 14:00, Germany’sIndustrial Production, and Germany’s Trade Balance; at 20:00, the UK’s BOE Policy Rate and Statement; at 20:30, remarks by BOE Governor Bailey; at 21:30, the U.S. Nonfarm Labor Productivity Index and Initial Jobless Claims;at 23:00: Canada’s Ivey Purchasing Managers’ Index, U.S. Wholesale Inventories, and remarks by U.S. Atlanta Fed President Bostic; and at 26:00: a U.S. 30-year Treasury auction. Be on the lookout for sudden spikes in pound volatility following the BOE policy rate announcement.

桜井 慶介

Author: Keisuke Sakurai

He has over 10 years of experience in FX trading. In the financial sector, he has been involved in investment management focused primarily on foreign exchange markets and has experience as an asset management advisor. Drawing on his extensive experience, he specializes in technical and fundamental analysis.

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