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- Pound slides as BoE rate cut bets rise
- Euro boosted by weak US dollar
- Fed expected to cut rates by 50 basis points
The pound fell off a cliff at the start of this week’s session after the Bank of England (BoE) suggested it would alter monetary policy in an effort to limit the economic impact of the coronavirus.
Sterling hit a four-month low against the euro and recorded significant losses against a number of the other majors.
GBP investors will be focusing on the UK’s latest construction PMI today. An expected improvement in construction activity last month may offer some support to the Pound.
Euro strengthens as US dollar falls
The euro roared higher on Monday amid the weakness of its peers.
The appeal of the single currency was also bolstered by comments from European Central Bank (ECB) policymaker Pierre Wunsch, who urged the bank not to ‘rush to fire our remaining fiscal ammunition’ in tackling the coronavirus.
However, the euro may suffer a setback this morning with the publication of the Eurozone’s consumer price index.
This comes as economists forecast today’s CPI figures will report inflation in the Eurozone will have slowed again last month.
US dollar under pressure
The US dollar stumbled at the start of the week on expectations that the Federal Reserve will cut interest rates by 50 basis points this month.
Today the Democratic primaries will be in the spotlight, with the US dollar potentially experiencing volatility if left-wing firebrand Bernie Sanders emerges victorious.
Tuesday 3rd March
09:30 GBP Markit/CIPS UK Construction PMI (Feb)
10:00 EUR Eurozone CPI
10:00 EUR Eurozone Unemployment Rate
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)