GBP/USD Holds Gains Ahead of BoE Decision, Scottish Election By

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By Yasin Ebrahim – The pound held gains against the dollar on Wednesday, a day ahead of the Bank of England monetary policy decision and the Scottish election that final polls show is too close to call.

rose 0.19%, $1.3912.

The Bank of England is expected to hold rates steady at 0.10% and keep its monthly bond purchases steady on Thursday.

“With only one member of the MPC (the soon-to-depart Chief Economist Haldane) who might feasibly be considered a hawk, the MPC will probably not yet see the need to taper its Gilt purchases from its current pace of £4.2bn per week,” Daiwa Capital said.

The BoE decision will also be accompanied by updated economic projections that will likely reflect the economic data that has “largely been stronger than the MPC expected when the last projections were published in February,” it added.

Beyond monetary policy action, the Scottish election is also likely to play a role in market direction for the pound.

Voters across Scotland will head to the polls in an election seen as a referendum on the country’s independence from the U.K., dubbed “Scoxit.”

If the Scottish Nationalist Party, or SNP, wins an overall majority in the elections, first minister Nicola Sturgeon has promised to demand a second referendum on independence.

Ahead of the vote, final opinion polls suggest the result is too close to call.

“The SNP is going into Thursday’s election in a very strong position,” Ipsos MORI said. “However, it is not possible to predict with confidence on the basis of these results whether the SNP will definitely win an outright majority of seats.”

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