Bank of England: Cautiously optimistic with negative rates still on the table
Fiona Cincotta February 3, 2021 7:41 AM
No change in policy is expected. The BoE could endorse negative rates as a tool but are expected to steer clear of using them. With vaccine numbers ramping up the central bank could also sound cautiously optimistic on the outlook.
Thursday at 12:00 noon followed by Andrew Bailey’s press conference at 12:30
The Bank of England is not expected to move on policy when it makes its monetary policy announcement and updates the bank’s quarterly forecasts.
The BoE raised its QE purchases in November to £875 billion, up from £725 billion. The health of the UK economy has deteriorated further since the last meeting as the UK entered into its third national lockdown.
Whilst the central bank has refused to rule out cutting interest rates BoE Governor Andrew Bailey has put more distance between himself and a move into negative rates in recent comments. Meanwhile, other members on the monetary policy committee remain enthusiastic about the strategy.
GBP/USD technical analysis
Following another retest of the multi year top for GBP/USD of 1.3750 the price has rebounded lower. It has fallen below its 50 sma on the 4 hour chart and is currently being contained by the 100 sma at 1.3665.
Should 1.3660 hold, resistance at 50 sma at 1.3695 comes into play before the bulls look for another attempt on 1.3750.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.