Pound Firms on BoE Confidence in UK Banking Sector

Pound Sterling (GBP) Strengthens Following BoE Stability Report

The Pound (GBP) trended higher against the majority of its peers on Thursday, with Sterling sentiment improving following the publication of the Bank of England’s latest financial stability report.

While the report saw the bank warn that the risks of a no-deal Brexit have risen since the start of the year, GBP exchange rates strengthened on the BoE’s confidence that the UK’s banking sector would be resilient enough to withstand a disorderly Brexit.

Looking ahead, we could see the Pound begin to fall back again today as a lull in notable data puts the focus back on UK politics and growing fears that the next PM could try to force a no-deal Brexit through parliament.

GBP/EUR Exchange Rate Climbs on Dovish ECB Minutes

The Pound to Euro (GBP/EUR) exchange rate rallied during yesterday’s European session, with the pairing rebounding from a near six-month low following the publication of the minutes from the European Central Bank’s (ECB) June policy meeting.

The single currency softened as analysts suggested the minutes support expectations that the ECB is gearing up to ease monetary policy with either a rate cut or by re-opening its quantitative easing programme.

However the Euro may have a chance to recover some ground later this morning, with an expected rebound in Eurozone industrial production in May potentially helping to boost the single currency.

GBP/USD Exchange Rate Gains Trimmed by Uptick in US Inflation

The Pound to US Dollar (GBP/USD) exchange rate continued to push higher yesterday as Federal Reserve Chair Jerome Powell’s dovish remarks weighed on USD sentiment.

However, the publication of the latest US CPI figures helped the ‘Greenback’ trim some of these losses later in the afternoon, with USD investors cheering a surprise rise in core inflation last month.

In the absence of any notable US data today, the US Dollar is likely to remain largely subdued as the anticipation of a Fed rate cut this month limits any upside in the currency.

GBP/CAD Exchange Rate Accelerates Despite Rising Oil Prices

The Pound to Canadian Dollar (GBP/CAD) exchange rate rose by around half a cent on Thursday, with the oil-sensitive ‘Loonie’ unable to hold off Sterling’s advances despite crude prices touching a six-month high amid rising tensions in the Middle East.

GBP/AUD Exchange Rate Slides on USD Weakness

The Pound to Australian Dollar (GBP/AUD) exchange rate fell back overnight on Thursday as a weakened US Dollar helped to bolster market risk appetite, lifting the ‘Aussie’.

GBP/NZD Exchange Rate Dips as Risk-on Mood Prevails

The Pound to New Zealand Dollar (GBP/NZD) exchange rate fell to a one-week low overnight on Thursday as the ‘Kiwi’ was also boosted by a slight uptick in risk sentiment.

Data Releases

09:00 GBP BoE Vlieghe Speech

10:00 EUR Industrial Production

13:30 USD PPI (Jun)

Matthew Andrews

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