Should investors be wary of pound volatility following the BOE's policy rate announcement?

Should investors be wary of volatility in the pound following the BOE’s policy rate announcement?

07.08.2025

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 level, with a real body candle. On the daily chart, the price has shifted from below the 20-period MA to above it. As the upward movement continues during today’s Asian session, we will be watching for further weakness in the U.S. dollar during U.S. trading hours.

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

Today’s schedule includes Japan’s foreign and domestic securities investment at 8:50, Australia’s trade balance at 10:30, New Zealand’s Q3 two-year inflation forecast at 12:00, Japan’s Economic Sentiment Index at 14:00, Germany’s industrial production and trade balance at 15:00, the Bank of England’s interest rate decision and policy statement at 20:00, andRemarks by BOE Governor Bailey, 21:30 US Nonfarm Productivity, US Initial Jobless Claims, 23:00 CA Ivey PMI, US Wholesale Inventories, US Remarks by Bostic (President of the Atlanta Fed), and 26:00 US 30-Year Treasury Auction.Be on the lookout for sudden spikes in pound volatility following the BOE interest rate announcement.