TD Securities: The Bank of England's decision is unlikely to drive significant volatility in the pound

On March 14, strategists at TD Securities said in a report that the Bank of England’s policy decision on March 20 is unlikely to be an important factor in driving the pound stronger. They said that the decision to keep interest rates unchanged has been priced in by the market, which expects the central bank to continue to cut interest rates in May. According to them, the pound is driven more by global macroeconomic factors than by exceptional events. Germany’s fiscal spending plan sent the pound lower against the euro, while fears of a recession in the US boosted the pound against the dollar. However, they say that short sellers seem to be overdoing the dollar, and that Germany’s fiscal spending is a long-term investment that will be spread over many years.