1. Home
  2. BER Research
  3. Market Updates
  4. Pound’s Early Losses Reversed by Rate Hike Speculation

Pound’s Early Losses Reversed by Rate Hike Speculation

Categories: AUD, CAD, EUR, GBP, News, NZD, USD

Sterling



GBP/USD 1 Week Chart

An early morning slump in the Pound (GBP) was reversed this morning as markets began to speculate on the possibility of the Bank of England raising interest rates earlier than expected.

The dissent of policymaker Kristin Forbes in last week’s policy meeting and expectations that inflation will continue surging this month has prompted economists to forecast that the BoE may hike rates later this year.

Euro

The Pound Euro (EUR) exchange rate stabilised close to its opening levels this morning after Sterling recovered from a brief dip during Asian trading.

German data showed that domestic Producer Prices rose to a five-year high in February, jumping from 2.4% to 3.1%, however the single currency was largely unmoved by the print in the face of the strengthening Pound.

EUR investors are likely to focus on Eurozone Wage data later this morning, with the Euro possibly rising if wage growth remains positive.

US Dollar

Sterling advanced against the US Dollar (USD) this morning, reaching a new three-week high as the ‘Greenback’ ceded ground following a disappointing Federal Reserve meeting last Wednesday.

Investors had hoped that the early start to monetary tightening would prompt the Fed to revise the number of rate hikes likely to take place this year, however in the post-meeting statement Fed Chair Janet Yellen stuck to the bank’s predictions that there will be two more rate hikes this year.

The US Dollar may strengthen later this afternoon if Chicago Fed President Charles Evans strikes a more hawkish tone as he kicks off a week of Fed speeches.

Canadian Dollar

The Pound Canadian Dollar (CAD) exchange rate rallied from an initial slump this morning as economists speculated that rising inflation will force the BoE to raise interest rates in the foreseeable future.

The oil-correlated ‘Loonie’ may also struggle to advance this week as crude prices continue to be weakened by reports of increased US drilling activity and concerns members of OPEC are not complying with production cuts.

Australian Dollar

Sterling found its recovery against the Australian Dollar (AUD) muted somewhat this morning as rising Chinese house prices strengthened the ‘Aussie’ on speculation that increased activity in the construction sector will raise demand for commodities.

New Zealand Dollar

After tumbling by around a cent this morning the Pound New Zealand Dollar (NZD) exchange rate was able to recoup roughly half of its losses as Sterling sentiment was improved by BoE rate hike forecasts.

TorFX Author: TorFX

"Our company's mission is to provide outstanding exchange rates, expert guidance and a simple, friendly service that people will want to recommend to others." – Jon Beddell (CEO). Contact TorFX for an FX Quote - UK & Europe - Australia & NZ.

You can get in touch with TorFx via email here or via the contact page.
Please note that the opinions of our authors are their own and do not reflect the opinion of BestExchangeRates and should not be taken as a reference to buy or sell any financial product. Full Disclaimer

BER logo BestExchangeRates - We make it Easy to Compare Exchange Rates & Fees of Banks and Currency Exchange & Payment Providers


Postal Address: Level 2/50 Bridge St, Sydney NSW 2000.

Disclaimer | Copyright | Privacy Statement


DISCLAIMER

BestExchangeRates.com is an information only service. By browsing on the website, using our comparison tools or FX provider referral service, you are asking BestExchangeRates to provide you with information about currency exchange products & services from multiple financial institutions.

We will try to show you a range of products & services in response to your request for information. The search results do not include all providers and may not compare all features relevant to you. In giving you product information we are not making any suggestion or recommendation to you about a particular product.

If you decide to conduct foreign exchange you will deal directly with a financial institution, and not with BestExchangeRates. Rates and product information should be confirmed with the relevant financial institution, see our terms of use for further details.

BestExchangeRates may receive fees or other benefits in relation to activity on the BestExchangeRates website. BestExchangeRates may receive remuneration for vendor referral links. Please note that the opinions of our authors are their own and do not reflect the opinion of BestExchangeRates and should not be taken as a reference to buy or sell any financial product.

Read our Full Terms of Service



COPYRIGHT

This website and its contents are the copyright of BEST EXCHANGE RATES PTY LTD © 2009-17. All rights reserved.

Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following. You may print or download contents to a local hard disk for your personal and non-commercial use only. You may copy some extracts only to individual third parties for their personal use, but only if you acknowledge the website as the source of the material.

You may not, except with our express written permission, distribute or commercially exploit the content. You may not transmit it or store it on any other website or other form of electronic retrieval system.

For more details or request distribution right please contacxt us here.