Sterling Rallies on Hawkish BoE

Sterling rallied to new recent highs after the Bank of England struck a more hawkish tone than expected in its statement, indicating a rate hike could come in the “coming months”. As expected, the Bank kept interest rates on hold, and only two members of the MPC dissented in favour of raising rates.

Previous Day's Market Highlights

Sterling rallied to new recent highs after the Bank of England struck a more hawkish tone than expected in its statement, indicating a rate hike could come in the “coming months”. As expected, the Bank kept interest rates on hold, and only two members of the MPC dissented in favour of raising rates.
 
Cable hit a new one-year high above 1.3400. Sterling-euro broke 1.1200 to trade at its highest levels since the end of July. The pound rose to a one-month high against the Canadian dollar, a two-month high against the Australian dollar, and a four-month high against the New Zealand dollar.
 
The dollar temporarily strengthened against the euro as US CPI surprised to the upside ahead of next week’s Fed meeting. 

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1268 1.1279 1.0745 4.73%
GBP / USD 1.3436 1.3450 1.2777 5.00%
EUR / USD 1.1923 1.2093 1.1708 3.18%
GBP/AUD 1.6801 1.6814 1.6165 3.86%
GBP / NZD 1.8547 1.8620 1.7522 5.90%
GBP / CAD 1.6338 1.6362 1.5837 3.21%

Today's Market Highlights

The US is in focus this afternoon with the release of Retail Sales and IndustrialProduction data (13:30, 14:15 BST). Both measures are forecast to have slowed in August, which may weigh on the dollar as investors evaluate the strength of the US economy ahead of the Fed’s next meeting.
 
Key items next week include final August Eurozone CPI, UK Retail Sales, and the Fed’s latest monetary policy meeting.  
 

Today's Economic Calendar

Time Currency Release Consensus Previous
11:00 EUR Trade Balance n.s.a. (Jul) €21.4B €26.6B
12:00 GBP BoE Quarterly Bulletin
13:30 USD NY Empire State Manufacturing Index (Sep) 19.0 25.2
13:30 USD Retail Sales MoM (Aug) 0.1% 0.6%
13:30 USD Core Retail Sales MoM (Aug) 0.5% 0.5%
13:30 USD NY Empire State Manufacturing Index (Sep) 19.0 25.2
14:15 USD Industrial Production MoM (Aug) 0.1% 0.2%
14:15 USD Capacity Utilization (Aug) 76.8% 76.7%