Pound picks up bids on the fourth consecutive positive day in Asia.  Monetary policy meeting of the Bank of England (BOE) seems to impact the pound positively.

The Bank of England is about to announce its latest decision on monetary policy on Thursday, June 24. This particular meeting will not include fresh macroeconomic projections, due in August, nor even a speech from governor Andrew Bailey. 

Elsewhere, The MPC is widely anticipated to keep the rates and the current facilities programs without any change. Policymakers already announced the central bank would be reducing the pace of its gilts purchases from £4.4bn a week to £3.4bn back in May, and no other measures will join this one, at least this time. Instead, the focus will be on how the Monetary Policy Committee will react to rising inflation.

As the UK gradually reopened the economy, the consumer price index shot above the BOE’s target. UK’s central bankers have been hawkish as of late, hinting at rate hikes in 2022, which are partially priced in. If Thursday’s statement suggests a possible move in the first half of the year, the pound would likely rally. Attention will also focus on how the committee votes. Back in May and on rates, the MPC voted 9-0 to keep them on hold in May, but about government bond purchases, the result was 8-1, as Chief Economist Andy Haldane vote in favour of reducing bond purchases.

It is worth noting that Haldane is leaving is the central bank after this meeting, which will lose one of the most hawkish members. Also, the central bank is expected to maintain a pinch of caution due to the uncertainty related to a possible third coronavirus wave in the country.  Nevertheless, policymakers can’t ignore upbeat macroeconomic figures from the second quarter of the year and would need to react to it rather sooner than later. 

On the other hand the U.S. dollar Fed officials are on the timing of a withdrawal of monetary stimulus. On Wednesday, two Fed officials said a period of high inflation in the United States could last longer than anticipated, just a day after Fed Chair Jerome Powell played down rising price pressures.  Flash U.S. manufacturing PMI climbed to a record high in June, but manufacturers are still struggling to secure raw materials and qualified workers, substantially raising prices for both businesses and consumers.

GBP/USD 4 Hour Chart:

Support: 1.3921 (S1), 1.3883 (S2), 1.3844 (S3).

Resistance: 1.3999 (R1), 1.4039 (R2), 1.4077 (R3).

All the catalyst confuse the traders by creating mixed trend for GBP/USD. We expect a neutral trend for GBP/USD.