The British pound plummeted nearly 100 points on Wednesday as traders continue to bet on nearly 50bps worth of rate cuts within the next year, according to overnight index swaps.
However, none of those cuts are anticipated to come on Thursday when the Bank of England meets. In fact, the central bank is widely expected to leave rates steady at 5.00 percent this time around, but since the BOE does not typically issue a monetary policy statement when they do not change the Bank Rate, this could end up being a non-event. On the other hand, as we mentioned in our forex forecast for the BOE rate decision, since the British pound has fallen so sharply in recent weeks, the mere lack of a rate cut could be enough to provide the currency with a boost. [B]My fundamental bias for the British pound on Thursday: bullish.[/B]