Great Britain Pound Waits for Super Thursday

The calendar of macroeconomic reports for Great Britain is almost empty this week with one major exception – Thursday. Almost all economic indicators scheduled for this week will be released on that day, thus the nickname “Super Thursday.” Of course, it should be very important for the performance of the Great Britain pound.

The Bank of England will announce its monetary policy decision on the Super Thursday. While no changes to the policy are expected, traders will closely watch the breakdown of votes. If the number of votes for raising interest rates increases, then the sterling will likely shoot to upside. Yet analysts think that probability of such an outcome is not very high as UK policy makers are likely to be spooked by Brexit worries. The BoE will release the Monetary Policy Summary that may provide insights into the central bank’s plans for monetary policy. The central bank will also release the Inflation Report. Considering that this important report is released just twice a year, it should be a major market-mover.

There will be another events on Thursday besides the BoE policy decision for market participants to watch for as plenty of economic reports are scheduled for release that day. The most important of them will be the manufacturing production indicator. It was falling during the past two months, and forecasters predict yet another month of decline. If such forecasts turn out to be correct, the pound will likely react negatively.

Of course, Britain’s currency reacts not just to news from Britain itself. The sterling (and the GBP/USD currency pair in particular) can be vulnerable to the hawkish outlook for Federal Reserve’s monetary policy. If Fed’s officials make hawkish comments this week, preparing US households for eventual higher borrowing costs, then the UK currency will likely suffer.

Due to uncertain fundamentals, analysts like Forex Crunch and DailyFX refrained from predicting a certain trend, issuing a neutral forecast for GBP/USD. Yet not everyone shared such view. For example, FX Empire said:

We still believe that the pair is firmly in the grip of bulls and we believe that 1.30 would be broken soon (maybe as soon as Monday) and then we should be moving towards our medium term target of 1.34.

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