Pound Sterling Weakens as Dovish BoE Bets Drag
The fallout from last Thursday’s Bank of England policy statement, where the UK central bank voted against raising rates and opted to downgrade GDP forecasts for 2017 and 2018, continued yesterday. Sterling suffered further declines versus the majors as dovish BoE bets weighed on demand on a day devoid of any significant UK data releases.
Sadly, today’s session is equally quiet on the British data front, suggesting GBP could sustain additional losses.
Pound to Euro Exchange Rate Close to 7-Year Low
The Pound to Euro exchange rate skidded to a fresh 10-month low yesterday, however, Sterling mounted a recovery late in the day after bouncing from technical support.
GBP/EUR is currently trading close to its lowest level for seven years as traders continue to bet on some form of tightening from the European Central Bank and a prolonged period of ultra-loose policy in the UK. Last week’s ‘Super Thursday’ announcement from the BoE really knocked the Pound for six, but Sterling was able to register a mild 20-pip gain yesterday afternoon.
Pound to US Dollar Exchange Rate Slides Through Support as US JOLTS Report Hits Record High
The Pound to US Dollar exchange rate plunged half a cent yesterday, sliding under longstanding psychological support to a fortnightly low as bearish Sterling sentiment dragged ‘Cable’ lower.
The bulk of the US Dollar’s gains came following the job openings and labour turnover survey (JOLTS) yesterday afternoon, which showed that a record high 6.16 million jobs opened up in June. The figure marked an improvement on May’s 5.66 million and beat expectations of 5.74 million, sending the ‘Greenback’ higher across the board.
Pound to Canadian Dollar Exchange Rate Down a Cent
Sterling softened by around a cent to strike an eight-day low versus the Canadian Dollar yesterday. The move appeared to reflect broader market bearishness on the Pound, rather than any positive demand for the ‘Loonie’. Indeed, oil prices drifted lower throughout the session, which ordinarily would be expected to have a negative impact on the Canadian Dollar.
Pound to Australian Dollar Exchange Rate Loses -80 Pips
The Pound softened by around -80 pips versus the Australian Dollar yesterday as markets continued to pile out of Sterling through fear that Brexit anxiety will hold back the British economy and prevent the Bank of England from tightening policy anytime soon.
Pound to New Zealand Dollar Exchange Rate Could Rally on Dovish RBNZ
The only important ecostat due for release today is the Reserve Bank of New Zealand’s policy decision. The RBNZ is not expected to hike the 1.75% interest rate but a hawkish message could send the New Zealand Dollar higher. Conversely, a cautionary policy statement would likely allow Sterling to appreciate against the ‘Kiwi’.
Data Released
NZD Reserve Bank of New Zealand Rate Decision (AUG 10)
NZD RBNZ’s Wheeler news conference on policy statement