Posts

Benefits of Portfolio Diversification

BoE Interest Rate Decision | MPC Vote Unchanged, Cut or Hike?

It’s time to prepare for the upcoming BoE Interest Rate Decision. Similarly to The FED, The BoE has attempted to raise rates but has had to succumb to economic factors and reduce them again.

As with all Central Bank Interest Rate Decisions, there is always a risk of massive volatility spikes.

In July 2016, the consensus was expecting a drop from 0.5% to 0.25%. Previously the rates had been a steady 0.5% for over seven years. The consensus was wrong, but The BoC did drop the rate at the next meeting the following month.

They remained there until November 2017, when they increased back up to 0.5%. By August 2018, they were at 0.75%, the highest they’d been since February 2009. Analysts expected that The BoE would drop the rate down to 0.0% in December 2018, but they held firm.

Then a pandemic hit, the economy went into meltdown and central banks needed to intervene. In March 2020, The BoE dropped the Interest Rate to 0.25%. Analysts have had a hard time forecasting what The BoE will do.

The expectation at the time was for 0.0%, but again The BoE didn’t oblige.
With Rates at 0.1%, the BoE has room to go lower, but the consensus suggests they won’t drop further, but they’ve been wrong before.

Interest Rate Decisions always carry the potential for colossal volatility spikes and should be considered a hazardous time to trade.

Are you a news trader?

Or maybe a breakout trader?

If you plan to trade The BoE Interest Rate Decision, Tweet us how you plan to tackle the volatility storm should it surface!

Brought to you by Darwinex: UK FCA Regulated Broker, Asset Manager & Trader Exchange where Traders can legally attract Investor Capital and charge Performance Fees.

Risk disclosure:

https://www.darwinex.com/legal/risk-disclaimer

Content Disclaimer: The contents of this post (and all other posts’) are for educational purposes only, and are not to be construed as financial and/or investment advice.

Benefits of Portfolio Diversification

RBA Interest Rate Decision | Will they stand firm?

It’s time to prepare for the upcoming RBA Interest Rate Decision. When the pandemic hit, Central Banks had to react quickly. Economies worldwide were being hit with restrictions, lockdowns, and torrid death tolls and infection rates.

Like many of the central banks, The RBA acted quickly, reducing rates. They decreased rates from 0.75% in February 2020 to 0.5% in March 2020. With two meetings in March 2020, the decision was further cuts were needed, so reduced again down to 0.25%.

After holding rates steady for the remainder of the year; The RBA Interest Rate Decision was to reduce rates to 0.1% (the same rate as The BoE).
The consensus has been correct in forecasting rates since May 2020.

Although world economies are starting to try to get back to a new ordinary, analysts still predict no change in Interest Rates yet. Will they continue their correct predictions?

Interest Rate Decisions always carry the potential for colossal volatility spikes and should be considered a hazardous time to trade.

Are you a news trader?

Or maybe a breakout trader?

If you plan to trade The RBA Interest Rate Decision, Tweet us how you plan to tackle the volatility storm should it surface!

Brought to you by Darwinex: UK FCA Regulated Broker, Asset Manager & Trader Exchange where Traders can legally attract Investor Capital and charge Performance Fees.

Risk disclosure:

https://www.darwinex.com/legal/risk-disclaimer

Content Disclaimer: The contents of this post (and all other posts’) are for educational purposes only, and are not to be construed as financial and/or investment advice.