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Forex: Sterling bulls will have to wait for BOE minutes

The Bank of England interest rate meeting today passed uneventfully with the base rate staying at 0.5% and asset purchases at £375 billion.  A formality many will say, as has been the case for the past five years ever since the base rate hit 0.5% back in March 2009 and certainly since August 2012 when asset purchases reached the £375 billion mark.  But today could be the day that sees the a descenting vote from the MPC calling for an interest rate hike.  Unfortunately, we have to wait until the minutes are released on 18th June which will be closely watched and if there is a vote for a hike revealed then, this could be the trigger for sending sterling back towards the 1.7000 level against the dollar and EURGBP back towards 0.8000.

We can now look forward to the ECB’s rate decision and proceeding press conference shortly, which is the far bigger risk event of the two.  Even if Mario Draghi disappoints pressure is likely to remain on EURGBP as the ECB is clearly in easing mode and the BOE isn’t too far off tightening mode.

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