Risk event for the week starting 18 September: EUR/GBP on BoE decision
UK inflation data, just before the rate decision, may steer the potential for a further two rises in the UK base lending rate.
Richard Snow, analyst at Daily FX, looks at the potential for further downside to the EUR/GBP trade, indicating the trade around a more hawkish Bank of England over the European Central Bank’s intentions.
The Bank of England
Jeremy Naylor speaks about some important things that will happen next week in the trading world. They focus on the Bank of England (BoE) deciding on their interest rates.
It's expected that there will be a small increase, but what's really important is the UK inflation data that will be released a day before the rate decision. If the inflation data shows that prices are going up more than expected, there might be another increase later in the year.
The EUR/GBP chart setup
He chats to Daily FX analyst, Richard Snow, about the EUR/GBP chart setup. It seems that there has been a drop in the pairing of these two currencies because the European Central Bank (ECB) has predicted some bad economic times.
They talk about some specific numbers to look out for in this pairing, like 0.8635 and 0.8565. If the inflation remains high, it might be a good time to sell and expect the numbers to drop even further to 0.8515.
Federal Open Market Committee
Richard also mentions that there will be a lot of change and unpredictability in the foreign exchange world next week because the Federal Open Market Committee (FOMC) will also be deciding on their interest rates.
This is something to keep an eye on as it can greatly affect the market and our trading decisions. So, to sum it up, next week there will be some important events happening involving interest rates and inflation data in the UK.
This will affect the trading world, especially when it comes to the EUR/GBP pairing. It's important to stay informed and be prepared for potential changes and opportunities.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices