The upcoming BoE rate decision has brought U.K. interest rates back into focus as the central bank has been the laggard in signaling an end to its quantitative easing efforts. The MPC has exhausted the 200 billion pounds that have been approved for its asset purchase program which has markets expecting that at Thursday’s policy meeting Governor King will announce a pause or an end to their efforts. Interest rate expectations have had little influence on GBP/USD price action with a 12% correlation as the central bank is expected to remain on hold throughout the majority of 2010. Risk trends continue to be the main driver of the pair’s volatility despite its recent divergence, as it still explains 37% of overall direction.
Read More Pound Losses Slowed As Risk Appetite Rises, BoE Could Set New Course
