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Weekly Roundup: Increased odds of BoE interest rate cut drag on pound

currency-newsWeekly Roundup: Increased odds of BoE interest rate cut drag on pound
The pound fell out of favour with investors as the odds of an early 2020 BoE interest rate cut appeared to rise, with the currency falling to a monthly low against many of the majors.

Although the central bank remained on hold at its December policy meeting the fact that two members of the Monetary Policy Committee (MPC) still voted for a rate cut left the pound under pressure.

With the headline UK inflation rate still falling short of the BoE’s 2% target and Brexit-based anxiety lingering the case for looser monetary policy seems to be increasing.

Coupled with the underwhelming nature of December’s set of UK PMIs this gave investors little cause for confidence in GBP exchange rates.

In the absence of any fresh UK data during the Christmas break the pound may struggle to find any renewed support in the near term.

As markets remain wary of the potential for a cliff-edge Brexit scenario in 2020 GBP exchange rates look set to maintain a downside bias in the days ahead.
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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