The Great British Pound is marginally lower against its counterpart, the Greenback, as currency movements overnight proved modest. Supported by the widely expected interest rate rise, the Sterling trades near a one-week low ahead of only the second cash rate rise since the global financial crisis. Opening this morning at 1.3125, Cable pivots decidedly to the UK for direction, with all eyes on the Bank of England.
Much of the currency movements overnight were muted as risk appetite again fled the market. President Trump was again the catalyst with the escalation of his tariffs to 25% from 10% on 200b worth of Chinese goods. The market response was limited however, with pundits suggesting this may be a negotiation tactic ahead of a reopening of trade talks between the worlds two biggest economies. Closer to home, the Cable was whittled lower as British factory activity was reported to be slightly below expectations although, again the movements were marginal at best.
The Pound now looks to a packed Thursday for direction with the Bank of England slated to release their Inflation Report, Official Bank Rate and Monetary Policy Summary. While it is widely expected that the BOE will increase the cash rate by 0.25%, Traders will take particular attention to the Policy Summary for any dovish or hawkish statements.