Trade Plan For UK BOE Official Bank Rate Decision 07/08/10

7:00am (NY Time) UK Offcial Bank Rate Decision  Forecast 0.50%   Previous 0.50%
ACTION: GBP/USD      N/A

UK’s BOE, Bank of England’s Monetary Policy Committee (MPC) is once again scheduled to release their interest rate decision today and the expectations are to keep both their official bank rates at 0.50% and APF (Asset Purchasing Facility) unchanged. The important focus as usual today will be the accompanying BOE Statement if they decide to release one, and it is customary that BOE will only release a rate statement if there is a change to either the Interest Rate or the APF. 

Bloomberg’s survey of over 35 economists showed unanimous decision at unchanged verdict, therefore it is very likely this would be a no event.

However, with the current CPI still above the 2% target, BOE may have to start withdrawing their stimulus at one point, and this could lead to a stronger GBP.  On the other hand, recent Inflation Report put out by BOE stated that CPI projection for the 2nd half of 2010 is down, likely to fall below the 2% target, which may lead to speculation of a weaker economic recovery.  

At any rate, this is likely to be a no trade, but if BOE surprises the market by hiking rate, we’ll BUY GBP immediately.

Related posts:

1. BOE Official Bank Rate Decision Strategy 06/10/10
2. BOE Official Bank Rate Decision 04/08/10
3. UK BOE Official Bank Rate Decision 03/04/2010
4. UK BOE Official Bank Rate Decision 02/04/10
5. Forex Trade Plan For BOE Interest Rate Decision 09/09/10
6. Forex Trade Plan For Uk BOE Rate Decision 10/07/10
7. Forex Trade Plan For UK BOE Interest Rate Decision 12/09/10
8. UK MPC Official Bank Rate Decision (BOE Interest Rate) 12/10/09
9. BOE Interest Rate Decision – Forex News Trading Plan 11/04/10
10. BOE MPC Official Bank Rate Decision 01/07/10

Tagged as: Afp, Asset Purchase Facility, Bank of England, BOE, Consensus Expectations, Economic Indicators, GDP, Gdp Release, Inflation, Interest rate, interest rate decision, monetary policy committee, MPC, MPC Rate Statement, Official Bank Rate, Prelim, Quantitative Easing, Sterling, Stimulus, uk gdp