Today the deputy Bank of England governor Broadbent gave a speech, and there had been speculation he would give his views on monetary policy. The markets were expecting him to hint at an interest rate hike later in the year, and throughout the morning Sterling gained on this expectation.
In fact, his comments were quite dovish, and he stated that he thinks Britain will suffer if its existing trade links with the EU are weakened by Brexit. He declined to give any views on interest rates and monetary policy, and so this morning gains were wiped out in an instant, sending GBP/EUR back to €1.13 and GBP/USD back to $1.29, as you can see from today's graphs below.
GBP/EUR
GBP/USD
What next for Sterling?
Tomorrow's unemployment data will be the next test for the Pound. Markets expect unemployment to be at 4.6%, with average earnings at 1.9%. If the actual figures are better than this, the Pound might rise. If the number is lower, then it's likely the Pound will drop into the €1.12's against the Euro.
if you need to buy currency and are worried about the falling rate, we offer a 'Forward Contract' that allows you to lock in today's rate for a period of up to 2 years. To find out more or simply get a quick quote, click here.
Labels: Bank of England, Currency, GBP, Interest Rates, Pound/Euro, Sterling falls, UK unemployment
