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GBP declines after Bank of England Governor Andrew Bailey's comments

GBP - British Pound

Sterling came under pressure yesterday after comments from Bank of England Governor Andrew Bailey. Andrew Bailey suggested that interest rates would remain low for the foreseeable future, warning that he didn’t think the situation with low interest rates would change markedly.

Boris Johnson has come short of suggesting a reversal in policy, however he has expressed concerns about the rapid spread of the Indian variant. Various health officials have called on the government to reconsider its roadmap and take a more cautious approach. If Covid cases rise, and the Prime Minister decides to change the UK's policy around restrictions, the pound could see a decline.

Key Movers

In the US, the USD was on the up this morning as investors are now beginning to assess the risk that US inflation will rise faster and prompt central bank interest rate hikes sooner than expected.

The euro will look ahead to the release of the ECB minutes from the latest meeting. Any signs that policy makers are becoming more confident in the outlook for the economy, could lead to gains for the single currency.

Expected Ranges

GBP/USD: 1.4025 - 1.4075 ▼

GBP/EUR: 1.1585 - 1.1615 ▼

EUR/USD: 1. 2105 - 1.2125 ▼