The Pound (GBP) tumbled against the majority of its peers this morning as Bank of England (BoE) Deputy Governor Ben Broadbent said it was too early to raise interest rates.
Broadbent’s comments have effectively squashed any chance of a rate hike when the BoE gathers next month for its policy meeting, disappointing many investors who had speculated that the bank was preparing to tighten policy after a number of hawkish statements in recent weeks.
However Sterling was able to claw back some of its losses with the release of the UK’s latest employment data, which revealed that the jobless rate fell to a new 42-year low of 4.5% in May.
The Pound Euro (GBP EUR) exchange rate nosedived to its lowest levels since November this morning in reaction to Broadbent’s comments.
Meanwhile the single currency was strengthened by the latest Eurozone Industrial Production figures, which rocketed from 0.5% to 1.3% in May.
After retreating by around half a cent against the US Dollar (USD) yesterday Sterling was forced to temporary cede even more ground this morning as Broadbent suggested he was not ready to hike rates.
The ‘Greenback’ meanwhile has continued to come under pressure as Trump JR released an email conversation between himself and a Russian lawyer which has led to further concerns about the role of the Russian State in the outcome of the US election.
The US Dollar may advance again later this afternoon however as the Federal Reserve’s Janet Yellen testifies in Congress, with the Fed Chair expected to remain committed to raising rates for third time this year.
The Pound Canadian Dollar (GBP CAD) exchange rate is currently trading close to the week’s starting levels as the UK’s employment data helped to offset the BoE interest rate disappointment.
However the ‘Loonie’ may push higher again this afternoon as the Bank of Canada (BoC) meets to make its latest rate decision, with the central bank expected to strike a more hawkish tone towards a possible rate hike in the near future.
Sterling is currently trading over a cent lower that is best levels against the Australian Dollar (AUD) yesterday as markets express their disappointment that UK interest rates are unlikely to rise in the immediate future.
New Zealand Dollar
It was a similar story for the Pound New Zealand Dollar (NZD) exchange rate today as the pairing slumped nearly two cents from a five-week high following the comments by Ben Broadbent.
You can get in touch with TorFx via email here or via the contact page.