Home Daily Commentaries Markets look ahead to BoE chief Andrew Bailey’s speech

Markets look ahead to BoE chief Andrew Bailey’s speech

Daily Currency Update

There was not much on the economic calendar to influence the pound yesterday. Instead, investors will now look ahead to a speech by Bank of England chief Andrew Bailey today for further clues on what the BoE could do next to tackle rising inflation which stands at 7%.

The pound was also on the back foot yesterday as investors mull the possible implications of the ‘partygate’ scandal. On Tuesday, Prime Minister Boris Johnson apologised to MPs once again for breaching lockdown laws after the police issued him with a fine. Despite calls from the opposition and some Tory MPs, Johnson plans to stay on as Prime Minister.

There are fears that the scandal is distracting the government from dealing with the two crises currently affecting the UK, which are the Russia-Ukraine war and the cost-of-living crunch. In addition, the uncertainty over whether Boris Johnson will be ousted is also pressuring the pound.

Key Movers

The Eurozone enjoyed better-than-expected trade data yesterday and some optimistic remarks from Mārtiņš Kazāks, a policymaker at the European Central Bank, who has said that it could be possible to raise its interest rate as early as July.

The ECB is still lagging behind the Bank of England in terms of monetary policy. The BoE has already hiked three times, bringing the Bank Rate to pre-pandemic levels and more rises are likely on the way.

Yesterday saw the first presidential debate in France between Macron and Le Pen with the latest polls suggesting that macron is at 56.5%, which should provide the Euro with some support.

Expected Ranges

  • GBP/USD: 1.3045 - 1.3115 ▲
  • GBP/EUR: 1.1915 - 1.1985 ▼
  • GBP/AUD: 1.7485 - 1.7655 ▲
  • EUR/USD: 1.0895 - 1.0955 ▲