Pound Rises: Traders Await BoE Monetary Policy Decision
(RTTNews) - The British pound strengthened against other major currencies in the European session on Monday, as investors await the Federal Reserve's (Fed) and the Bank of England's (BoE) monetary policy announcements on Wednesday and Thursday.
The CME FedWatch tool indicates that traders have a 94.2% chance of the central bank lowering interest rates by 25 basis points (bps) to 4.00%-4.25% in Wednesday's policy announcement. Growing labor market concerns have heightened Fed dovish speculation.
Meanwhile, the Bank of England (BoE) is anticipated to maintain interest rates at 4.00 percent, due to the ongoing persistence of inflationary pressures in the UK economy.
The UK jobs report, which is published later on Tuesday, will be monitored by traders.
In the European trading today, the pound rose to more than a 2-month high of 1.3600 against the U.S. dollar, from an early low of 1.3549. The next possible upside target for the pound is seen around the 1.37 region.
Against the euro and the Swiss franc, the pound advanced to 5-day highs of 0.8633 and 1.0825 from early lows of 0.8652 and 1.0795, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.85 against the euro and 1.09 against the franc.
The pound edged up to 200.45 against the yen, from an early low of 199.93. On the upside, 201.0 is seen as the next resistance level for the pound.
Looking ahead, Canada manufacturing and wholesale sales for July, U.S. NY Empire State manufacturing index for September and U.S. NOPA crush report are slated for release in the New York session.
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