Central Banks are in focus for currency markets today

The BoE & ECB are both expected to keep policy on hold today, but markets will watch for any updated forward guidance. The US releases CPI data.

Previous Day's Market Highlights

Amidst a relatively quiet calendar, the pound was a touch softer yesterday. The pound saw some volatility on political headlines regarding potential threats to May’s leadership. Sterling-euro held around 1.12 but briefly dropped below the key level, and sterling-dollar traded either side of 1.30.
 
The Aussie strengthened overnight on above-forecast employment data. The Unemployment Rate held steady at 5.3% as forecast, the lowest level since 2012, while Employment Change and the Participation Rate were both higher than projected. This pushed sterling-Aussie further below 1.82.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1214 1.1266 1.0991 2.44%
GBP/USD 1.3035 1.3088 1.2686 3.07%
EUR/USD 1.1624 1.1734 1.1336 3.39%
GBP/AUD 1.8142 1.8377 1.7414 5.16%
GBP/NZD 1.9890 2.0031 1.9167 4.31%
GBP/CAD 1.6959 1.7190 1.6596 3.46%

Today's Market Highlights

Central banks are in focus today as both the Bank of England and the European Central Bank announce their latest policy decisions. Whilst neither bank is expected to announce any major policy changes, markets will keep a close eye on any updated guidance on inflation expectations—and thus interest rate expectations. Any signs of caution could lead to sterling or euro weakness, whilst a more positive outlook could instead be currency positive. If there are no new clues, the announcements could instead be relatively non-events.
 
The Bank of England will release its decision and statement at 12:00 BST, followed by the ECB decision at 12:45 and ECB press conference at 13:30.
 
In the US, August CPI will be in focus, with core inflation forecast to hold steady at 2.4% and headline inflation to slip from 2.9% to 2.8%.

Today's Economic Calendar

Time Currency Release Consensus Previous
12:00pm GBP BoE Interest Rate Decision 0.75% 0.75%
12:00pm GBP BoE Monetary Policy Summary & Minutes
12:45pm EUR ECB Interest Rate Decision 0.0% 0.0%
12:45pm EUR ECB Deposit Rate Decision -0.4% -0.4%
1:30pm USD CPI YoY (Aug) 2.8% 2.9%
1:30pm USD Core CPI YoY (Aug) 2.4% 2.4%
1:30pm EUR ECB Press Conference
3:00pm USD Fed's Quarles Speaks
6:15pm USD Fed's Bostic Speaks

Caxton