With Governor Mark Carney settling into his role, today's Bank of England policy decision has a level of practical and academic interest.
Academic as to how much sway Carny now holds over the other more entrenched members of the Monetary Policy Committee. Practical as UK economic statistics, other than the shock drop in August industrial production of 1.1 percent against the 0.4 percent rise expected, continue to improve and should the UK central bank adopt a more hawkish tone look for sterling to rally.
We got a bearish technical signal last week on cable but a hawkish BOE will trump any technical shift in the near term and further out. There are also mixed technical signals on cable with the 100-day simple moving average crossing above the 200-day SMA on October which would signify an uptrend in price. The recent trading peak of 162.60 on October 1 is a barrier but it’s close at 159.31.
No change is expected from the BOE but as we have seen in recent months expectations can be a risk.