The pound retreated on Thursday after the Bank of England (BoE) struck a more cautious tone than expected following its latest policy meeting.
It’s Super Thursday! Should we be bracing for currency volatility? Keep scrolling to find out…
What’s been happening?
US news was dominating headlines yesterday, with the latest controversial act of US President Donald Trump sparking fresh concerns about his management of the world’s largest economy.
The US dollar was unsettled by the revelation that Trump sacked FBI Director James Comey, with some parties believing this step to be an abuse of power.
While Trump argued that the sacking was in consequence of the poorly timed reopening of the investigation into Hillary Clinton’s email server, not everyone is convinced that this was the true motivation. Many speculate that the decision was actually taken in order to undermine the FBI’s investigation into suspected Russian involvement in the US election – involvement which may have contributed to Trump’s shock victory.
With the US dollar being pressured by the move, the Australian and New Zealand dollars climbed. Both Antipodean currencies were able to push the pound away from its latest multi-month highs over the course of Wednesday. The New Zealand dollar, however, later tumbled after the Reserve Bank of New Zealand (RBNZ) indicated it would be leaving interest rates at record lows for the foreseeable future.
Meanwhile, demand for the euro remained tepid as European Central Bank (ECB) President Mario Draghi kept the odds of a monetary policy adjustment depressed during a speech in the Netherlands.
What’s coming up?
After a (let’s face it) pretty boring week for UK data, we’re going to be hit with a barrage of releases in the hours ahead.
While the Bank of England’s (BoE) ‘Super Thursday’ announcements are liable to have the biggest impact on the pound, there are other stats to be aware of.
We’ve got the UK’s industrial and manufacturing production figures (both of which are expected to show a month-on-month decline) construction output data and the latest trade balance report. Surprisingly upbeat data could give GBP exchange rates a little lift before the BoE decision.
In other news we’ve got the European Commission’s economic forecasts, Canada’s new housing price index and US initial jobless claims.
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)