The Pound (GBP) remains subdued against the majority of its peers this morning as investors are reluctant to move ahead of the Bank of England (BoE) rate decision later this afternoon.
After over a decade of policy tightening, the BoE is widely expected to reserve last year’s rate cut at its November policy meeting today, raising interest rates back to 0.5%, up from a record low of 0.25%.
However, with the move already being largely priced in by markets, attention will turn to whether this is the start of a new cycle of monetary tightening or a one-off, with sentiment likely to dip if it proves to be the latter.
The Pound Euro (GBP EUR) exchange rate saw little movement overnight on Wednesday as the pairing remained in a holding pattern ahead of the BoE rate decision later today.
However, the single currency was able to find some gains at the start of the European session this morning with the release of Germany’s latest employment data as it showed that the jobless rate held at a record low of 5.6%.
Sterling had a bit of a roller-coaster ride against the US Dollar (USD) yesterday as investors reacted to the latest US economic data.
The ‘Greenback’ enjoyed some initial gains on Wednesday afternoon as the latest US Manufacturing PMI revealed that the domestic factory sector continued to expand at a robust pace in October.
However, the US Dollar was unable to hold onto these gains at the end of the US session as it became clear that Donald Trump is likely to nominate Federal Reserve Governor Jerome Powell as the next chair of the Fed, disappointing some investors who expected a more hawkish candidate.
The Pound Canadian Dollar (GBP CAD) exchange rate slipped from a five-month high on Wednesday as the oil-correlated ‘Loonie’ was bolstered by a surge in crude prices, with the commodity reaching its highest levels in over two years as OPEC production cuts appear to impact global stocks.
Sterling tumbled by around a cent against the Australian Dollar (AUD) last night as the ‘Aussie’ was strengthened by a larger than expected jump in domestic trade figures, with a strong lift in Australia’s trade surplus in September bolstering hopes of a jump in GDP in the third quarter.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate also drifted lower in overnight trade on Wednesday as the ‘Kiwi’ was able to build on its recent gains thanks to the downturn in the US Dollar.