The US dollar fell sharply on Monday as risk-on trade and falling US Treasury yields weighed heavily on the safe-haven currency.
Although policymakers did not indicate any desire to implement negative rates at this stage, GBP exchange rates still trended sharply lower in the wake of the meeting.
Growing fears over the future of the UK economy also weighed on the pound at the start of the week as rapidly rising Covid-19 infections pointed towards a second wave of the virus.
With the government poised to implement fresh restrictions in an attempt to curtail infections, the UK’s fragile economic recovery looks set to falter in the months ahead.
Looking ahead, resuming UK-EU trade talks will also likely drive pound movement on any headlines that emerge from negotiations this week.
With the Internal Market Bill returning to Parliament for discussion, progress in talks may be limited this week.
September’s UK manufacturing and services PMIs could put additional pressure on the pound if both sectors show signs of losing momentum.
Any weakening in the services PMI on the month may give GBP exchange rates particular cause for weakness, given that the sector accounts for more than two thirds of the UK’s gross domestic product.
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)