It has been quite a week in cable trading: after an initial fall, the clearing up of the Conservative Contest sent GBP/USD nearly 500 pips higher. When Theresa May actually entered No. 10, we had a “sell the fact” effect. And while politics did steal the show, the main event for markets is the decision of the central banks. There is a divide between the conviction of bond markets that see a rate cut and economists which doubt the BOE will move today. The pound is now leaning towards a no-cut and this implies a big fall if he does indeed cut. Why would Carney and co. not act? More economic data: the inflation report is expected in August and it will provide the BOE more data. It is a quarterly report. In addition, we may have some more economic indicators. Updates from the government: Phillip Hammond is the new Chancellor of the Exchequer and he is less than one day in his new job. We know little about his plans and he probably has not made them up yet. What we do know is that he meets with Carney before the decision. Will Hammond influence Carney to wait? That is a speculation. A rate cut will not help: an interest rate of 0.5% is already low and a cut will not really boost lending. The problem is demand. Inflation can rise too much: the fall in the exchange rate already serves to raise prices and as stimulus for exporters. Cutting rates could push the pound lower and accelerate inflation. But there are reasons to cut rates or add QE: Sending a signal that the BOE is here to help. This would be positive for markets now and will leave options open for the August 4th meeting. A marginal help from the lower lending rates: one can argue that there is some help. Another small help to exporters: a weaker pound can help exporters on the margins. The actual impact is minimal and it is more about sending a message. What message will we hear from Carney? At the moment, GBP/USD is back up to 1.3240 after already recovering to 1.3275. It seems that the market is pricing out a hike. This means that GBP/USD is likely to fall hard if we do get a cut and will rise just a bit if we don’t have a cut. More: Will Carney cause carnage to the pound? [Video] GBP Into BoE: Any Bounce A Selling Opportunity – BofA Merrill BoE to cut rates by 0.25%, more stimulus in August Resistance awaits at 1.3335 and 1.3480 in case of a no cut. In case of a cut, we can expect a move to 1.3120, followed by 1.30 and 1.2850. Here is the chart: Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Forex News Today: Daily Trading News share Read Next GBP: Positioning & Momentum Signal Ahead Of BoE – Yohay Elam 6 years It has been quite a week in cable trading: after an initial fall, the clearing up of the Conservative Contest sent GBP/USD nearly 500 pips higher. When Theresa May actually entered No. 10, we had a "sell the fact" effect. And while politics did steal the show, the main event for markets is the decision of the central banks. There is a divide between the conviction of bond markets that see a rate cut and economists which doubt the BOE will move today. The pound is now leaning towards a no-cut and this implies a big fall if he does… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.