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Markets

Traders See BOE Decision Having Bigger Forex Impact than ECB

  • 11 economists predict BOE will raise 25bps while 35 see 50bps
  • At BOE’s December meeting, the MPC vote was split three ways
outside the Bank of England (BOE) in the City of London.

outside the Bank of England (BOE) in the City of London.

Photographer: Jason Alden/Bloomberg

Currency option investors are looking for the Bank of England’s rate decision to have a bigger near-term impact on the pound than European Central Bank’s move later Thursday will have on the euro. 

Both central banks are forecast to raise their benchmark rates by 50 basis points Thursday, but with the UK forecast by the International Monetary Fund to be the only Group of Seven member whose economy will shrink this year, market rates indicate more volatility in sterling than the euro.