Forex Analysis (Wed January 26 2011, 4:30am NY Time EST) - UK MPC Meeting Minutes

Henry Liu

Former FPA Special Consultant
MPC Meeting Minutes is scheduled to be released today and since it is customary for BOE (Bank of England) not to release a statement along with its interest rate decision (2 weeks ago) if there were no changes in either rate decision or APF (Asset Purchasing Facility, UK’s quantitative easing program), today will be the first time for a glimpse into what took place during this meeting, here is the forecast:

4:30am NY Time UK MPC Meeting Minutes Forecast 1-0-8 Previous 1-0-8
ACTION: GBP/USD BUY (2 Vote For Hike) / SELL (2 Vote For QE)

The Trade Plan
We will be looking at the vote count today. If we get 2 votes for hiking 25 basis points, we should see some strengthening in the Sterling and a BUY GBP/USD trade should be justified. If we get 2 votes for quantitative easing, or to increase the current APF from 200 Billion Pound, GBP should weaken and a SELL GBP/USD trade should be justified.

Due to the nature of this release, you need to have a newswire or audio service in order to trade it. We should see a steady market reaction after the release and possible carry over to the NY Session.

I'll be looking for an after news retracement trade. For more information, please read:
Henry's News Trading Methods.

The Market
Once again, MPC or Monetary Policy Committee, from Bank of England (BOE) will be releasing their meeting minutes on the Rate Decision meeting along with the actual vote count over the rate decision and the Asset Purchasing Facility program. If you recall, MPC once again left both intereste rate and APF unchanged, and there were no statement issued whatsoever.

With the yearly CPI figure approaching 4.0% level, market speculation for further quantitative easing has diminished, that's until this week when the Quarterly GDP release came out at -0.5% for the last quarter of 2010.

Therefore, it would be very interesting to see what BOE is going to do in the next rate decision.

Additional Thoughts
Let's focus on that fact that at the time for this meeting BOE didn't have the information that we have now... therefore if we get any bullish statement in this release, market will probably ignore it; but if we get a bearish statement, we could see market sell off Sterling again.

Pre-news Consideration
No Pre-news trading today.

Here is the historical data & chart for UK MPC Meeting Minutes


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Hello Henry, I have not been able to trade recently as I have been hospitalised but have still been following your advice on iphone.
A big thank you for all that you do.
Bye for now,