Pound plummets as doubts cast over BoE rate hike next month

The pound attempted to mount a recovery on Thursday however it found itself falling even lower in the evening following comments from Bank of England (BoE) Governor, Mark Carney.  

Sterling continues to slide, with GBP/EUR tumbling to €1.1386, GBP/USD slumping to US$1.4044 and GBP/CAD slipping C$1.7800. Only GBP/AUD and GBP/NZD are holding their head above water this morning, holding at AU$1.8235 and NZ$1.9419 respectively.

The Eurozone will release its latest consumer confidence reading later today with the indexes expected drop back into negative territory, likely pressuring the euro…

What’s been happening?

The pound initially fell on Thursday as the UK’s latest retail sales figures printed even lower than expected in March, with sales growth shrinking from 0.8% to -1.2% last month.

The slide in sales appeared to have little impact on Sterling however as GBP rallied later in the afternoon.

Unfortunately the pound’s gains proved to be short-lived as Carney cast doubts over the possibility of a rate hike in May, following his suggestions that Brexit uncertainty could delay the BoE’s plans to raise interest rates.

The GBP/EUR exchange rate was also aided by comments from European Commissioner for Economic and Financial Affairs Pierre Moscovici, who suggested ‘time is running out’ to implement Eurozone reforms.

Meanwhile the gains in the GBP/USD exchange rate were trimmed yesterday by an uptick in US manufacturing activity this month as the Philadelphia Fed manufacturing index climbed to 23.2 in April.

What’s coming up?

With little economic data to move the pound today the focus for GBP investors is likely to be on a speech by the BoE’s Michael Saunders later this morning.

This could see the pound plummet even further should he echo Carney’s comments yesterday in suggesting the bank could delay plans to hikes interest rates next month.

Meanwhile the euro may find itself on the back foot later this afternoon with the publication of the Eurozone’s latest consumer confidence figures.

Economists suggest that the bloc’s recent slowdown and concerns over global trade tensions may see the sentiment index fall below 0 for the first time in six months.

Finally the US dollar will also be met by a lull in domestic data on Friday, with the currency possibly struggling to find any momentum unless any bombshells are dropped by either of the Federal Reserve policymakers set to speak today.