On Tuesday, February 11, 2025, Bank of England (BoE) Governor Andrew Bailey will deliver a speech titled "Are we underestimating changes in financial markets?" at the University of Chicago Booth School of Business in London.More hawkish than expected is good for currency.As the head of the central bank(BOE), which controls short term interest rates, he has more influence over the nation's currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary polices.
Here's how this, combined with other fundamental data, might affect the GBP and the EUR/GBP trade directional bias:
Andrew Bailey's Speech:
Monetary Policy: Bailey's remarks followed the BoE's decision on February 6, 2025, to cut the Bank Rate by 0.25 percentage points to 4.5%.
Future Rate Cuts: Bailey stated that the BoE expects to be able to cut the Bank Rate further as the disinflation process continues. However, future adjustments would be judged meeting by meeting.
Inflation Outlook: The BoE expects inflation to increase to about 3.7% this year before returning to the 2% target.
Economic Outlook: There is considerable uncertainty over the extent to which weakness in UK GDP persists.
Upcoming GDP and Other Data (Thursday):
GDP m/m (Forecast: 0.1%, Previous: 0.1%): A reading in line with forecasts may have a neutral impact. A significantly higher number could be GBP positive, while a lower number could be GBP negative.
Prelim GDP q/q (Forecast: -0.1%, Previous: 0.0%): A negative reading would confirm a potential economic slowdown, which could be GBP negative.
Construction Output m/m (Forecast: 0.3%, Previous: 0.4%): Any deviation from the forecast may cause movement in GBP.
Goods Trade Balance (Forecast: -18.3B, Previous: -19.3B): A smaller deficit than forecast could be GBP positive.
Index of Services 3m/3m (Forecast: 0.1%, Previous: 0.0%): A higher reading than forecast could be GBP positive.
Industrial Production m/m (Forecast: 0.3%, Previous: -0.4%): A positive reading could support the GBP.
Manufacturing Production m/m (Forecast: 0.1%, Previous: -0.3%): A positive reading could support the GBP.
Prelim Business Investment will be watched
Potential Impact on GBP and EUR/GBP:
Dovish Signals from BoE: If Bailey's speech reinforced expectations of further rate cuts due to easing inflationary pressures and economic concerns, the GBP could weaken.
Data Dependency: The BoE emphasized that future rate decisions are data-dependent.
Overall EUR/GBP Directional Bias: Given the above factors, the EUR/GBP trade could experience increased volatility this week. If the UK data comes in weaker than expected, this could strengthen the EUR against the GBP.
Important Considerations:
Market Sentiment: Market sentiment and global economic factors can also influence currency movements.
Data Revisions: Initial data releases are subject to revision, which can sometimes lead to a different market reaction.
Risk Management: employ appropriate risk management technique and trade at your own risk,this isn't financial advice but my trading strategy which i teach for free!!!!!!!!free!!!!! free!!!!
Here's how this, combined with other fundamental data, might affect the GBP and the EUR/GBP trade directional bias:
Andrew Bailey's Speech:
Monetary Policy: Bailey's remarks followed the BoE's decision on February 6, 2025, to cut the Bank Rate by 0.25 percentage points to 4.5%.
Future Rate Cuts: Bailey stated that the BoE expects to be able to cut the Bank Rate further as the disinflation process continues. However, future adjustments would be judged meeting by meeting.
Inflation Outlook: The BoE expects inflation to increase to about 3.7% this year before returning to the 2% target.
Economic Outlook: There is considerable uncertainty over the extent to which weakness in UK GDP persists.
Upcoming GDP and Other Data (Thursday):
GDP m/m (Forecast: 0.1%, Previous: 0.1%): A reading in line with forecasts may have a neutral impact. A significantly higher number could be GBP positive, while a lower number could be GBP negative.
Prelim GDP q/q (Forecast: -0.1%, Previous: 0.0%): A negative reading would confirm a potential economic slowdown, which could be GBP negative.
Construction Output m/m (Forecast: 0.3%, Previous: 0.4%): Any deviation from the forecast may cause movement in GBP.
Goods Trade Balance (Forecast: -18.3B, Previous: -19.3B): A smaller deficit than forecast could be GBP positive.
Index of Services 3m/3m (Forecast: 0.1%, Previous: 0.0%): A higher reading than forecast could be GBP positive.
Industrial Production m/m (Forecast: 0.3%, Previous: -0.4%): A positive reading could support the GBP.
Manufacturing Production m/m (Forecast: 0.1%, Previous: -0.3%): A positive reading could support the GBP.
Prelim Business Investment will be watched
Potential Impact on GBP and EUR/GBP:
Dovish Signals from BoE: If Bailey's speech reinforced expectations of further rate cuts due to easing inflationary pressures and economic concerns, the GBP could weaken.
Data Dependency: The BoE emphasized that future rate decisions are data-dependent.
Overall EUR/GBP Directional Bias: Given the above factors, the EUR/GBP trade could experience increased volatility this week. If the UK data comes in weaker than expected, this could strengthen the EUR against the GBP.
Important Considerations:
Market Sentiment: Market sentiment and global economic factors can also influence currency movements.
Data Revisions: Initial data releases are subject to revision, which can sometimes lead to a different market reaction.
Risk Management: employ appropriate risk management technique and trade at your own risk,this isn't financial advice but my trading strategy which i teach for free!!!!!!!!free!!!!! free!!!!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.