Sterling has started the day on the back foot against most majors, posting losses against the Euro and US dollar. This comes ahead of this mornings latest UK Gross Domestic Product (GDP) data at 09:30.
Figures month on month are forecast to remain at 0.3% - any deviation from this and we could see some sterling movement.
What movements will we see for the Pound?
Should we see a lower figure from today's GDP figures then sterling is likely to come under pressure as it makes it less likely we will see an interest rate hike in November. Interest rate movements, along with Brexit negotiations will dominate the market in the coming weeks and months. Recently speculation has been increasing that the Bank of England (BofE) are ready to raise rates, with some analysts believing this could happen as early as November.
Some doubt was shed over these thoughts yesterday with the BofE Deputy Governor Jon Cunliffe suggesting the timing of the UK's first interest rate rise since 2007 is an "open question"
It is clear to see there is divided opinion among the Monetary Policy Committee of the central bank surrounding interest rates. For me I think they will hold fire from raising in November and will possibly follow the move of the US Fed who have raised rates the previous two years in the month of December.
Should they refrain from raising in November then I would expect the Pound to struggle and could easily see a move down from the current levels.
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Labels: Bank of England, BofE, Euro, FED, Monetary Policy Committee, UK GDP, US Dollar