Pound climbs following BoE’s split decision
Philip McHugh May 9th 2025 - 2 minute read
Pound (GBP) climbs despite BoE rate cut
The pound (GBP) rallied yesterday, despite the Bank of England (BoE) cutting interest rates, as markets dialled back bets on more BoE rate cuts this year.
With two policymakers voting to leave rates unchanged and the bank only modestly lowering its inflation forecast, markets now expect just two more rate cuts in 2025 – one fewer than was priced in before the meeting.
Looking ahead, a speech from BoE Governor Andrew Bailey could impact GBP today. If Bailey signals an openness to further rate cuts should inflation ease more quickly than anticipated, Sterling may face pressure.
Euro (EUR) dented by USD strength
The euro (EUR) found some support at the start of yesterday’s European trading session thanks to stronger-than-expected German industrial production figures.
However, EUR faced pressure as the session progressed due to the common currency’s strong negative correlation with a rising US dollar (USD).
Eurozone economic data is thin on the ground today, potentially leaving the euro without a clear trajectory.
US dollar (USD) buoyed following Fed decision
The US dollar gained ground yesterday as it continued to draw support from the Federal Reserve’s hawkish interest rate decision on Wednesday evening.
A larger-than-expected drop in new US jobless claims helped to keep the ‘greenback’ afloat into the afternoon.
A number of Fed officials are due to deliver speeches today. More signals that rates could remain higher for longer may boost USD, although any indication of recession concerns could pressure the American dollar.
Canadian dollar (CAD) slips despite recovering oil
The crude-linked Canadian dollar (CAD) faced selling pressure yesterday despite rising oil prices, possibly amid ongoing trade tensions with the US.
Canada’s latest unemployment figures are in the spotlight today. Could an expected uptick in joblessness see CAD slide?
Australian dollar (AUD) recovers on Chinese trade data
The Australian dollar (AUD) wavered overnight, initially softening before better-than-expected Chinese trade data helped lift the ‘Aussie’, despite a slump in exports to the US.
New Zealand dollar (NZD) softens as sentiment sours
Meanwhile, the New Zealand dollar (NZD) weakened overnight as an anxious market mood dampened the risk-sensitive currency’s appeal.
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Written by
Philip McHugh