British Pound is Strengthening in Anticipation of BoE’s Rate Hike
The US dollar rose, as investors await the results of a two-day meeting of the US Federal Reserve to find out about the future tightening of the policy. It is expected, that the US central bank will leave interest rates unchanged. Investors will monitor any new hints that the Fed will resume rate hikes next month.
Markets expect that US President Donald Trump will announce his choice of the new chairman of the Fed. Most likely, Trump will appoint the new head of the Fed, Jerome Powell, who is on the Board of Governors of the Central Bank.
It is expected, that the Bank of England will raise the interest rate level at its meeting to be held tomorrow. The Bank of England has changed its rhetoric in recent months, which has provoked a sharp increase in expectations regarding the first interest rate increase in 10 years. Analysts suggest that the British pound may fall significantly if the regulator makes it clear that the rate hike was a one-off gesture. If the Bank of England hints that the November increase is only the first step towards a full cycle of tightening, the pound may grow and reach the level of $1.33.