Sterling soars to two-year high as BoE signals slower rate cuts
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Daily Currency Update
The pound surged to its highest level in over two years this morning against a basket of currencies, driven by investor expectations that the Bank of England will reduce interest rates at a slower pace compared to the US Federal Reserve.This strengthening of the pound follows the Bank of England's decision to hold interest rates steady last week, accompanied by a clear signal that borrowing costs must not decrease "too fast or by too much."
Key Movers
The euro weakened against the US dollar and pound as traders anticipate further interest rate cuts from the European Central Bank (ECB) this year, with a 25 basis point reduction highly likely at the upcoming October meeting.The euro faced additional downward pressure after disappointing services and manufacturing PMI data, which mostly fell short of expectations, pointing to an economic slowdown. This combination of monetary easing expectations and weak economic data is likely to increase volatility in the currency markets, potentially causing the euro to decline further relative to other major currencies.
Expected Ranges
- GBP/USD: 1.3325 - 1.3395 ▲
- GBP/EUR: 1.1985 - 1.2055 ▲
- GBP/AUD: 1.9515 - 1.9595 ▲
- EUR/USD: 1.1085 - 1.1145 ▲