ECB and BoE Rate Decisions: Scenario Analysis

The two biggest event risks for currency traders over the next 24 hours are the Bank of England and European Central Bank monetary policy decisions. The first up to bat will be BoE, followed by the ECB. Both central banks are expected to leave interest rates unchanged but the tone of their statement and comments can have a dramatic impact on the euro and British pound. As we have seen from the market’s reaction to Tuesday’s Bank of Canada announcement, talk is not cheap when it comes from a central bank. The hawkish comments from the BoC have driven the loonie sharply higher. Tomorrow, the central question that investors will have for the BoE and ECB is not whether they will be hawkish but how long they plan on remaining dovish.