Eyes on the BOE

The U.S. dollar stabilized after the Federal Reserve Fed left interest rate unchanged as expected after concluding a two-day monetary policy meeting but upgraded its view on the economy. The committee said it expects that “further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the committee’s symmetric 2 percent objective. Meanwhile, the Aussie dollar weakened despite a jump in the country’s trade surplus, as escalating US-China trade war is likely hurting the Aussie. Global financial markets remained focused on the U.S.-driven international trade war, with U.S. administration officials saying on Wednesday that President Donald Trump is proposing a higher 25 percent tariff on $200 billion worth of Chinese imports.

In currencies, the USDJPY dropped by 0.15% to 111.56 yen though it still held on its gains, following the Bank of Japan’s pledge to keep rates low for an extended period. EUR/USD remained soft trading at 1.1650. GBPUSD traded lower by 0.2% at 1.3100 ahead of the Bank of England’s policy meeting later on Thursday, with markets widely expecting interest rates to be raised for the second time since the global financial crisis.

In commodities, Oil prices advanced on Thursday despite data from the Energy Information Administration (EIA) showed an unexpected build in crude supplies. Inventories of U.S. crude rose by 3.803 million barrels for the week ended July 27, confounding expectations for a draw of 2.794 million barrels, according to data from the EIA.

For today important main economic releases are coming from UK. BOE Inflation Report.

MPC Official Bank Rate Votes, Monetary Policy Summary , Official Bank Rate BOE Gov Carney speech Moderate to high volatility is expected for GBP and pair related to sterling.