GBP/USD Supported As Bank Of England Announces Interest Rate Decision Soon

GBP/USD strengthened above 1.2700 in quiet trading on Wednesday as GBP traders prepare for the latest report from the Bank of England (BOE) on Thursday. Although UK economic data continues to fall short of expectations, it is not severe enough to cause concerns about an outright recession in the UK economy, and the Bank of England is expected to keep interest rates unchanged at 5.25%.

On Wednesday, the US market was closed for the Juneteenth holiday, and trading volume remained low, giving the US dollar currency pair a chance to gain slightly. US markets will resume trading on Thursday, when the number of US initial jobless claims for the week ending June 14 will be released. The median market forecast expects that the number of US initial jobless claims will fall slightly to 235,000 last week from the previous 242,000, but will remain above the four-week average of 227,000.

Prior to this, the latest interest rate decision of the Bank of England and the Bank of England’s updated monetary policy report will be released during the European session. The market generally expects the Bank of England to keep interest rates unchanged at 5.25%. The Bank of England’s Monetary Policy Committee (MPC) previously voted 7 to 2 to keep interest rates unchanged, and market participants will pay attention to any changes in the vote. It is currently expected that seven members of the Monetary Policy Committee will continue to vote in favor of standing pat, while two members are expected to support an early rate cut.

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