Pound Sterling (GBP) Slips Following BoE Rate Decision
The Pound (GBP) was forced to retreat on Thursday, falling from the weeks best levels after markets were left disappointed by the Bank of England’s lack of clear policy guidance.
Going in to this week’s policy meeting, GBP investors were hopeful that we could see the BoE maintain its reasonably hawkish tone, leaving them dejected when the bank offered up a distinctly more dovish outlook as they warned of downside risks to the UK economy.
Looking ahead, we may see the Pound remain subdued throughout today with the UK’s latest borrowing figures expected to show that the public deficit expanded in May.
GBP/EUR Exchange Rate Losses Trimmed by ECB Speculation
The Pound Euro (GBP/EUR) exchange rate fell back yesterday, with the pairing slipping from a one-week high in the wake of the BoE’s rate decision.
However, tempering the single currency’s advance were lingering concerns that the European Central Bank (ECB) will lower rates this year, with a gloomy bulletin adding further weigh to this speculation.
However the Euro may be forced to surrender some of these gains later this morning, with the Eurozone’s latest PMI figures expected to show growth in the bloc’s private sector remained subdued this month.
GBP/USD Exchange Rate Buoyed as Markets Price in July Fed Rate Cut
Despite being knocked lower following the BoE’s rate decision, the Pound US Dollar (GBP/USD) exchange rate was still able to close yesterday’s session higher as the ‘Greenback’ remained on the defensive.
This came as markets began to price in a July rate cut from the Federal Reserve, after the US central bank signalled that it could loosen its monetary policy this year following Wednesday’s rate decision.
In the absence of any notable US economic data today, expect to see USD investors remain focused on the Fed’s policy outlook, likely limiting movement in the US Dollar.
GBP/CAD Exchange Rate Tumbles as Oil Prices Soar
The Pound Canadian Dollar (GBP/CAD) exchange rate plummeted to a new eight-month low on Thursday as a fire was lit under the oil-sensitive ‘Loonie’ when oil prices shot up over 5% as tensions in the Middle East continued to rise.
GBP/AUD Exchange Rate Slumps as Risk-Appetite Improves
The Pound to Australian Dollar (GBP/AUD) exchange rate briefly fell by 0.5% yesterday before stabilising around half a cent off its best levels as the ‘Aussie’ was buoyed by an uptick in market risk-appetite driven by the fall in the US Dollar.
GBP/NZD Exchange Rate Dips as US Dollar Tumbles
The Pound to New Zealand Dollar (GBP/NZD) exchange rate largely mirrored the action in GBP/AUD yesterday with the pairing slipping as the weakened US Dollar drove demand for the ‘Kiwi’.