20 June 2024, GBP/USD
Events to watch out for today:
14:00 GMT+3. GBP - Bank of England key interest rate decision
15:30 GMT+3. USD - Number of initial applications for unemployment benefits
GBPUSD:
GBPUSD consolidated above 1.2700 in quiet trading on Wednesday. Traders are preparing for data from the Bank of England (BoE), which is expected to leave rates unchanged at 5.25% despite UK economic data still falling short of expectations, but not so much as to raise institutional fears of outright recession.
On Wednesday, markets were subdued after US markets closed for the Juneteenth holiday, leading to lower volumes in the broad market and giving US Dollar counterparties a small profit. U.S. markets will return to action today, just in time for the release of fresh data on U.S. initial jobless claims for the week ended June 14. According to average market forecasts, the number of new applications for unemployment benefits in the US will fall slightly to 235k from the previous reading of 242k, but still above the four-week average of 227k.
Before that, the London market session will see the release of the Bank of England's latest rate decision and an updated monetary policy report from the UK central bank. Markets generally expect the Bank of England to keep interest rates unchanged at 5.25%. The Bank of England's Monetary Policy Committee (MPC) voted seven to two in favor of keeping rates unchanged, and market participants will be watching for any change in the outcome of the vote. Seven MPC members are forecast to continue to vote in favor of keeping rates on hold, while two will hope for a rate cut soon.
Trading recommendation: Trade predominantly with buy orders at the price level of 1.2734. We consider sell orders at the price level of 1.2670.
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