The pound stabilised on Tuesday in the wake of some hawkish comments from a Bank of England (BoE) policymaker.
The release of July's jobs report helped Sterling to quicky regain its footing, with a surprise fall in domestic unemployment and stronger-than-expected uptick in average earnings reflecting positively on GBP exchange rates.
The publication of the UK’s consumer price index then reinforced these gains. August’s CPI figures reported an unexpected drop in headline inflation, but saw core inflation climb to a new 30-year high. Bolstering expectations the Bank of England (BoE) could pursue a 75bps hike at its September policy meeting.
However the pound then relinquished the majority of these gains in the latter half of the week.
The most notable losses stemmed from the publication of UK’s latest retail sales figures, with a larger-than-expected contraction in sales growth stoking recession fears and undermining BoE rate hike bets.
The BoE’s upcoming interest rate decision will no doubt be the focus for GBP investors this week. Could another 50bps rate hike from the bank stoke concerns the bank is falling behind the curve and pile pressure on the pound?
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)