SPOTLIGHT SHIFTS TO BOE RATE DECISION ON THURSDAY
Monetary policy is front and centre on Thursday as the Bank of England (BOE) delivers its latest interest-rate verdict. Although BOE officials are expected to stand pat, the official statement may provide clues about the pace and timing of future policy adjustments.
Action begins bright and early with a Swiss government trade report due for 06:00 GMT. Switzerland’s trade surplus is forecast to narrow significantly for May as import growth outpaces exports.
The Swiss National Bank (SNB) will deliver its policy verdict at 07:30 GMT. Interest rates are projected to hold steady at -0.75%.
The Bank of England’s Monetary Policy Committee will conclude its meeting in the afternoon local time, giving rise to the official rate statement at 11:00 GMT. A median estimate of economists is forecasting a 7-2 vote in favor of keeping the benchmark interest rate at 0.5% and the size of the asset purchase facility at £435 billion.
Policymakers will likely deliberate about ongoing Brexit talks as Prime Minister Theresa May looks for a clean break out of the European Union (EU). That is proving to be a difficult sell as Brexit talks continue to drag on.
In North America, payrolls processor ADP Inc. will report on Canadian employment for the month of May. ADP’s April report showed a monthly gain of 30,200 workers to payrolls.
In the United States, the Department of Labor will release its weekly jobless claims report for the week ended 16 June. The number of Americans filing for first-time unemployment benefits is projected to rise 2,000 to a seasonally adjusted 220,000.
Meanwhile, the Housing Finance Agency will report on home prices at 13:00 GMT. The housing price index is projected to rise 0.3% for April.
Bank of England Governor Mark Carney is expected to deliver a speech late in North American trade. The speech is currently scheduled for 20:15 GMT.
Europe’s common currency rebounded Wednesday from its current brush with yearly lows. After bottoming near 1.1540 on Tuesday, EUR/USD has recovered to around 1.1570. The bulls are capped firmly below 1.1600, with immediate support now located at 1.1536.
Cable bounced back from seven-month lows on Wednesday, but the upside was severely limited. GBP/USD reached a session high of 1.3209 but was later sent all the way back to the 1.3160 handle, where it now trades. The intraday high from Wednesday is likely to serve as a short-term barrier for price action.
The trading of USD/CHF has been choppy over the past week as the pair consolidated post-FOMC gains. USD/CHF is currently trading at 0.9965, with the bulls eyeing the psychological 1.000 level as the next major hurdle. On the flipside, near-term support is located at 0.9920.