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Traders await critical week ahead of BoE meeting

15 Mar 2021

Despite facing significant pressure before the weekend, the British Pound is expected to bounce back and compete against the rises of the Euro and Dollar this week. The Sterling trades at 1.660 and at 1.3928 at the time of writing against the Euro and the Dollar respectively. 

The highest the British currency has been traded against the Euro was at 1.6972 – in March, whereas against the Dollar, the highest value was that of 1.40155.

Strategists said, “The GBP remains supported across the board in part because investors continue to expect the BoE to start removing some of its accommodation once its QE programme comes to an end later this year.” Traders are awaiting a Bank of England March policy meeting this week, hoping for support to the Pound. 

ING’s FX Strategist, Francesco Pesole noted, “The BoE should keep its constructive outlook in place, with the fast pace of vaccination) and the pace is poised to double from the next week onwards) supporting the optimistic outlook for the economic recovery.” 

Moreover, the Euro is trading within the 1.1834-1.2050 range against the American Dollar on Monday, opening the week 0.15% softer. Last week, the shared currency rose by 0.34% - marking its first weekly gain in a month. It closed the week over the 1.19 mark. Countries have seen a lifting of borrowing costs due to a global bond sell-off. "The potential for wider spreads and bad news on vaccine roll-outs could over the short-term see EUR weaken further." 

On the other hand, the GBP/NZD trades at 1.9380 after seeing the steepest loss of all major currencies last week. Analysts are expecting the New Zealand Dollar to pick up pace once again in the coming weeks and months.