Good morning,
Yesterday’s pound trading evened out as expected across much of yesterday, with GBPEUR and GBPUSD trading within a half-cent range as most in the pound markets held their breath awaiting the critical 09:30 GMT manufacturing and service numbers.
For today, the path is both clear and stark – if the inflation report numbers fail to impress, the chances of a Bank of England interest cut from 0.75% to 0.50% will skyrocket. Currently, that number sits at 48%, which has allowed the pound to push on since Tuesday’s posting of better than expected employment numbers. However, as the BoE has already made abundantly clear, the 09:30 release will have to be considered before a final decision is made – if that number pushes over 50% and beyond, the pound will really start to suffer. Rarely has a data report held so much sway over the pound’s health going into a new year.
If you are reading this over a morning coffee and have a current transfer that includes sterling; there is still time to call in to offset risk and protect your bottom line. After the report releases, all bets are off for the pound – it stands to be a very busy end to the week indeed.
Have a great weekend,
Author: Joshua Haden-Jones, Senior Relationship Manager
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