FX.co ★ Inflation data in the US and Bank of England meeting in the focus of markets

Today, the market will focus on the decision of the Bank of England on monetary policy, as well as on published data on consumer inflation in the US.

The market as a whole does not expect the British Central Bank to decide in changing the monetary policy. However, there is still the possibility that the rates may be raised or the volume of asset purchases will be reduced following consumer inflation slightly corrected in July, strengthening pressure. This is seen in the published Tuesday economic data from the UK. The only obstacle that still remains in the way of the beginning of the process of raising rates remains to be the uncertainty as to how the UK will leave the EU. Will this process be painful or not?

If the decision of the Bank of England tends toward tighter monetary policy, it will support the British pound against all major currencies without exception.

In addition to the meeting of the Central Bank of Great Britain, investors' attention will be drawn on Thursday to the published data on consumer inflation in the US. Undoubtedly, they will influence the mood of the members of the Fed, which will meet next week. If inflation rates rise above forecasts, we should expect some strengthening of the Fed's rhetoric regarding further prospects for raising interest rates. Therefore, against this background, the US dollar can receive local support. At the same time, if the data turns out to be weaker than expected, it will lead to a decrease in the dollar. Nevertheless, it will hardly be a strong one, as the market as a whole does not expect economic data to be much better.

In general, assessing the prospects of the currency market, we can say that an important milestone will be the outcome of the meeting of the Fed, which will be held next week on September 19-20. It is where a decision would be made regarding the start of the reduction of the bank's balance sheet. If this process takes place quickly, then we should expect a smooth global turn of the dollar from a downtrend to an upward trend. It can also get support for the implementation of part of the election program of D. Trump regarding the tax reform.

Forecast of the day:

The EURUSD pair may be under pressure on the wave of positive data on consumer inflation in the US and will fall to 1.1800.

The EURGBP pair is trading near the 0.9000 mark. Overcoming this level on the wave of the Bank of England's monetary policy session results may continue its decline to 0.8885.