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Big day for GBP with BoE announcement

Big day for GBP with BoE announcement

The markets today will be awaiting the rate decision from the Bank of England at Midday today. While no change in the interest rate is expected, an extension to the current quantitative easing program has been forecast for some time. However, a recent run of positive UK data may have reduced the case for printing more money this month. Nevertheless, the consensus view on the markets is for an additional £75 billion of QE and anything less than £50 billion will likely weigh heavily on Sterling.

The European Central Bank also meets today and investors are braced for dovish comments around the serious threats to economic growth which may weigh on risk appetite. Negotiations in Greece on new austerity measures drag on ahead of this evening’s meeting of Eurozone finance ministers. The latest a deal can be finalized in order to facilitate the next tranche of bailout funds to Greece is the 15th February. If this deadline is not met, Greece risks not being able to meet a €14 billion bond repayment due on the 20th March.

GBP came under some selling pressure ahead of today’s BoE announcement losing almost a cent against the US dollar with GBP/USD consolidating above $1.58. Meanwhile, EUR/USD remains well supported above $1.3250 on the expectations of an eventual Greek resolution.

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