Daily Currency Update
GBP - British PoundThe Bank of England yesterday kept its interest rates on hold and didn’t alter its asset purchasing programme as anticipated by the market. However, Governor Andrew Bailey’s comments afterwards did strike a more hawkish tone, as the bank admitted that monetary policy conditions would need to tighten if the economy recovers. Interestingly for the bank, they revised their forecasts for inflation up to 4%. For the pound though it wasn’t all joy yesterday as it was put under pressure from the US dollar in particular.
Key Movers
All in all its been a quiet week so far from a rates point of view. There has been a few interesting data releases and central bank announcements but nothing as of yet to set the FX market alight. Perhaps this afternoon non-farms job report could be the spark required. The Fed is very clear in its view that job growth is very important for its monetary policy decision making in the medium term, so July’s numbers will be watched very closely. A big hit on the jobs report will see more calls for a hawkish approach from the Fed, hiking rates and tapering its bond buying programme, leading to stronger conditions for the US dollar.
Expected Ranges
- GBP/USD: 1.3880 - 1.3940 ▼
- GBP/EUR: 1.1730 - 1.1780 ▲
- GBP/AUD: 1.8780 - 1.8860 ▼
- EUR/USD: 1.1820 - 1.1890 ▼