In another twist to sterling’s path, the pound has opened this morning slightly higher against both the dollar and the euro ahead of tomorrow’s Monetary Policy Committee meeting. GBPEUR finally topped 1.17 this morning, after nearly 3 weeks of attempting to break the level. Since then however, there has been a sharp sell off with the exchange dropping 20 pips.
Tomorrow Bank of England MPC meeting is not expected to give up any surprises. Interest rates are expected to remain flat with all 9 members voting for the rates to remain unchanged. As always, any deviation away from the expected could see sterling move. Many are predicting that the BoE will turn their attention to the second half of the year and echo comments made by the chair, Andrew Bailey, that economic activity is due to pick back up again as lockdown ends.
Towards the end of the UK working day, in the States the Fed will present their economic outlook and interest rate decision to the markets. Previously the Fed has reiterated the desire to keep rates low for years to come to support the economy. Any unexpected hint at bringing that forward could see USD gain strength through the course of the evening.
Have a great day.
Jack Nicholls, Relationship Manager.
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