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The BoE is expected to keep their benchmark interest rate at 0.50% as remaining downside risks to growth will most likely lead the central bank standing pat until the end of 2009. Fundamental Outlook The BoE is expected to keep their benchmark interest rate at 0.50% as remaining downside risks to growth will most likely lead the central bank standing pat until the end of 2009. Although, we are seeing global leaders at the G-8 meeting talk about developing an exit strategy from the current easing cycle, there is a consensus that it is still too soon to consider executing it.

The Pound fell over 200 pips following a report that the BoE will announce additional quantitative easing at their upcoming policy meeting.

British Pound May Remain Under Pressure Ahead of BoE Rate Decision Fundamental Outlook for British Pound: Bearish -?U.K. 1Q GDP Contracted By 2.4% as the final reading was revised lower from the preliminary -1.9% -?The June U.K. manufacturing PMI reading rose to 47.0 from 45.4, which was the highest since May 2008 -?UK PMI Services fell in June to 51.5 from 51.7, diming recovery hopes The British Pound was derailed mid-week by a larger than expected contraction in 1Q GDP of 2.4% which saw the GBP/USD fall over 400 pips from its high of 1.6746.

The US dollar and Japanese yen both staged notable rallies across the majors, but with the BOE, ECB, and BOC all due to announce policy decisions on Thursday,…