GBPUSD and Pound Pairs Look for Clearer Reaction to BoE Report

Talking Points:

• The Bank of England Quarterly Inflation Report is one of the clearest signals for rate speculation

• Over the past six months, UK rate expectations have tumbled - dragging the Pound lower with it

• A scenario where the report is more hawkish than the market expected carries the greatest potential

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Trading the Euro and 'risk' recently has been a game of excruciating anxiety. In contrast, the BOE Quarterly Inflation Report offers up a straightforward event risk for the Pound and GBPUSD. Monetary policy has proven one of the most effective and forceful drivers for the Forex market over the past six months, but shaping stimulus and rate hike speculation requires decisive data and clear central bank rhetoric. With the BoE, a policy of no updates when there are no changes at meetings means speculation surrounding this once-hawkish leaning group has been left unmoored. However, the Quarterly report offer a comprehensive update at a critical time for the currency - after a significant depreciation and a wave of accommodation from many counterparts. What are the scenarios? Which Pound-based crosses are better positioned for different outcomes? We discuss these questions in today's Strategy Video.

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