FOREX TRADERS

[ultimatepick]

Hey man ... been away from civilisation to study GBP.
I keep on seeing comments like the one below. Can somebody tell me HOW they determine PRICED IN INTEREST RATE HIKES? GBP/USD is at 1.9600 ish and it has 2 future interest rate hikes priced in apparently.

...markets are close to pricing in two further interest rate increases...

I know Mister Lava asked about that a couple of posts ago but I would like to know HOW they determine that. I would love to have that tool in my arsenal.

Welcome to all new members. This place is kicking!

http://www.forexfactory.com/showthread.php?p=249437#poststop
Bank of England minutes preview
The Bank of England minutes will be watched closely on Wednesday for further evidence on the bank’s likely policy over the next two months.

There is a strong probability that some members of the nine-member committee voted for a rate increase at the meeting and one key issue is the number of votes cast for an increase. A 5-4 vote for unchanged rates would increase speculation that the bank will tighten policy again in April while a wider margin would swing the odds towards May.

The degree of bank concern over inflationary pressure in the minutes will also be an important consideration for the markets.

To some extent, however, the impact is likely to be lessened by the strong Tuesday inflation data. The bank will need to adopt a very tough stance for markets to price in further rate increases as markets are close to pricing in two further interest rate increases.

Overall, Sterling is unlikely to find further buying support on the minutes given the amount of tightening priced in.
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Analysis by Investica LTD