Today, the pair is expected to witness some strong movements at the time of the announcement of the British GDP data first and may be after the FOMC meeting if it signaled any surprising change in monetary policy or any bold announcement by Bernanke in his speech following the rate decision.
First, the UK will release GDP data at 08:30 GMT, where economists predict to see 0.6% expansion in the first quarter from the 0.5% contraction in the last three months of 2010, while the annual reading is predicted to show 1.8% expansion from the previous 1.5%.
An improvement in growth data may provide hopes that the British economy is out recession and thereby it will lower stagflation concerns. Thus, the BoE may be more concerned more with lowering inflation that reached 4.0%, double the bank’s target and 1% above the upper limit. Accordingly, if the data matched forecasts or came better, the pair is expected to rise and vice versa in the case of missing forecasts.
Yet, after the FOMC meeting there may be some fluctuation in the pair’s movement that will probably be affected by Bernanke’s comments following the rate decision which is expected to witness to no change in interest rate.
Written by ForexMansion.com