Despite some challenging market conditions, the pound pushed back yesterday to recapture the 1.1750 mark against the euro and continued its path upwards during the early session this morning. GBPUSD has been fairly quiet throughout the week as we head towards the all-important MPC interest rate decision tomorrow. EURUSD has found itself battling to regain 1.1300 after US PPI gave the dollar fresh impetus yesterday afternoon.
At 7am this morning UK CPI was released, showing inflation has risen to ten-year highs to 5.1%, surpassing market expectations of 4.7%. This is well over the Bank of England’s target inflation rate of 2% and continues to add pressure on the central bank to raise interest rates, though it is widely expected that the BoE will hold at 0.1% tomorrow. The spread of the Omicron variant may well keep any rate hikes at bay until the threat dissipates.
Today, the Fed’s Monetary policy statement will be released at 22:30GMT. Investors are expecting a monthly tapering of $30 billion in asset purchasing. Over in the UK and EU, interest rate decisions are due to be released tomorrow at 15:30 for the BoE and 16:15 for the ECB, these will be watched very closely with any deviations likely to cause volatility within the markets.
Have a great day.
Thomas Read, Senior Relationship Manager.
Whilst every effort is made to ensure the information published here is accurate, you should confirm the latest exchange rates with WorldFirst prior to making a decision. The information published is general in nature only and does not consider your personal objectives, financial situation or particular needs. Full disclaimer available here.