In the beginning of 2020, it was expected that the Bank of England will significantly reduce interest rates, however, the number of Committee members, including Governor mark Carney, has publicly commented on the weak state of the UK economy, which is due to the country's withdrawal from the European Union. But the recent economic data of Britain was more positive than expected. For example, the index of purchasing managers ' services index the health of the dominant sector of the country in December was 50, compared with a forecast of 49.2.
A research note from Danske Bank said, “despite some economic data releases that came out stronger than expected, we still think the Bank of England will cut rates by 25bps.p.”. However, the Bank of England decided to keep base rate and leave it at 0.75%. 7 Committee members voted for and 2 against lower interest rates that just by the fact that the members of the Committee on monetary policy noted signs of improving sentiment in the economy.
At this stage special attention will be directed to the press conference of the Central Bank of England at 07:30 Eastern time (12: 30 GMT) where mark Carney will participate in the last time since March he was replaced by Andrew Bailey.
Due to the rapid spread of coronavirus, the demand for us dollar increasing significantly. At 03:00 PM Eastern time futures U.S. dollar index rose 0.1 percent to 97,895, trading near two-month high. The dollar was the most profitable among the 10 most important currency in January, while the dollar index rose 1.6% this month.
The total number of confirmed deaths has reached 170, while the number of infected patients is approaching 8 thousand as at the end of Wednesday, said the National Commission of health of China. In addition, cases of infection have been reported in at least 15 other countries and in each province of mainland China.
The rapid spread of the virus led to the weakening of the currencies of developing countries, it is not surprising that investors began to seek refuge in the dollar. Experts point out that the pound could be volatile, as there is some uncertainty around the meeting of the Committee on monetary policy Bank of England.
At 07:00 et GBP/USD traded at 1.3070 USD and EUR/GBP was at the level of 0.8426. At 03:00 et GBP/USD was trading 0.2% below the level of 1.3001, and the pair EUR/GBP — 0.2% above $ 0.8468.