Trading volatility: GBP/EUR around BoE rate decision

There are four central bank rate decisions in the coming week; in Australia, Japan, the US and here in the UK, but it’s possibly the BoE around which risk may be the most elevated. It will be no surprise that the BoE will keep rates on hold as it's not a meeting where a Monetary Policy Report is published into the forecasts for inflation and growth. There is one in May, but it's widely thought that the August meeting will be the point where rates may come down. Under current expectations that will be after the Federal Reserve and the European Central Bank start to cut rates. So could it be beneficial to continue to hold sterling. If that is the case then there is GBP/EUR resistance at 117.74 to use as an upside price target.

(AI Video Summary)

The Reserve Bank of Australia

Next week, the market is expected to be pretty crazy, especially in the foreign exchange markets. There are four big meetings happening with central banks, and they could have a big impact on the Japanese yen and the sterling-euro trade. The Reserve Bank of Australia probably won't do anything, but the Bank of Japan might start making some changes, which could affect the yen. They're thinking that interest rates in Japan might go up by April, which is different from what other banks are doing. On the other hand, the Federal Reserve might lower interest rates, possibly in June, but they're worried about inflation. All eyes are on the Bank of England though. They probably won't lower interest rates until August because they're worried about rising salaries and how that can lead to more expensive things.

The Bank of England

For traders, the GBP/EUR is the one to watch. It's going up right now, and if the Bank of England says some positive things, it could get even higher. Right now, it's bouncing between 1.1560 and 1.1774, but if things go well, it could reach levels we haven't seen since 2022. The Bank of England is making their decision next Thursday, and it's a huge deal for the sterling-euro trade.

The Bank of Japan

To sum it up, next week is going to be pretty wild with all these central bank meetings happening. The Bank of Japan might change some things, the Bank of England is worried about salaries and stuff, and the Federal Reserve might lower rates. Traders are keeping an eye on the sterling-euro trade, because if the Bank of England says good things, it could shoot up. The big decision from the Bank of England next Thursday is a big deal, so keep an eye on it.