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Weekly roundup: Pound plummets after BoE surprises by staying pat

currency-newsWeekly roundup: Pound plummets after BoE surprises by staying pat
The pound suffered a dramatic fall from grace last week, with the currency falling around 1% against the euro and US dollar in the wake of the Bank of England’s latest interest rate decision.

This came as the BoE voted to leave interest rates on hold following its November policy meeting. This came as a major disappointment to GBP investors, many of whom had been expecting a hike in light of some notably hawkish comments from policymakers in recent weeks.

The BoE’s accompanying growth forecasts also took their toll on Sterling sentiment, as the bank slashed its expectations for both 2021 and 2022.

Also negatively impacting GBP exchange rates last week were ongoing Brexit tensions, as the UK and France clashed over fishing rights.

However helping to temper the pound’s losses in midweek trade was the publication of October’s finalised services PMI, which saw growth in the UK’s vital services sector revised slightly higher.

Looking ahead, the primary catalyst of movement in the pound this week is likely to be the UK’s latest GDP figures.

Sterling could stumble following their release on Thursday, as the preliminary figures for the third quarter are expected to report a notable slowing of domestic growth.

In the meantime, we are also likely to see Brexit developments continue to influence GBP trading sentiment, with the pound poised to fall if talks between the UK and EU regarding the Northern Ireland protocol remain deadlocked.
 
Philip McHugh

Philip McHugh

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)

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