Previous Day's Market Highlights
Sterling fared better against the euro, regaining 1.1100 after a dip on the UK data, whilst dollar pressure limited the euro’s gains.
The Aussie jumped overnight as employment data surprised to the upside. Employment Change and the participation rate both rose. The Aussie jumped around a cent against the pound, pushing the rate back below 1.6500.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
|GBP / EUR||1.1116||1.1134||1.0745||3.49%|
|GBP / USD||1.3211||1.3329||1.2777||4.14%|
|EUR / USD||1.1884||1.2093||1.1662||3.56%|
|GBP / NZD||1.8260||1.8315||1.7522||4.33%|
|GBP / CAD||1.6098||1.6237||1.5837||2.46%|
Today's Market Highlights
The highlight today is the Bank of England meeting (12:00 BST). Hawkish expectations rose following Tuesday’s acceleration in inflation, but fell back yesterday as wage growth did not in turn pick up pace. High inflation has been weighing on real wages, one of the factors leading investors to expect the Bank of England to keep policy on hold today.
Key therefore will likely be the votes. Last month, MPC Members Saunders and McCafferty held their calls for a rate hike. A 7-2 breakdown in favour of holding rates is expected today; any deviation from that vote would therefore see volatility.
Sterling could rally if a third member dissents, but the greater risk may be to the downside with the Bank likely to continue looking through the inflation overshoot for the time being.
In the afternoon, investors will closely watch the latest CPI data from the US (13:30 BST). Softer inflation has weighed on Fed rate hike expectations, one of the reasons the dollar has been on the backfoot lately. An acceleration could therefore provide the dollar with support, alleviating some concerns, whilst a further dip would likely renew pressure on the dollar.
Today's Economic Calendar
|12:00||GBP||BoE Interest Rate Decision||0.25%||0.25%|
|12:00||GBP||Monetary Policy Summary|
|13:30||USD||Initial Jobless Claims (8 Sep)||300K||298K|
|13:30||USD||CPI YoY (Aug)||1.8%||1.7%|
|13:30||USD||Core CPI YoY (Aug)||1.6%||1.7%|