With the Bank of England scheduled to deliver its rate decision in just a few hours time the Pound weakened against the US Dollar, edging toward a five-week low, but managed to hold onto gains made against the Euro yesterday.
The Pound Sterling Exchange Rate was in the region of 1.1733 against the Euro as of 10:00 GMT
1 Euro is currently worth 0.8529 pence
A better-than-expected UK services PMI report, coupled with concerning political developments in Portugal, helped the Pound advance on the Euro and hit a high of €1.1774.
However, the BoE uncertainty weighed on the British currency.
Economists forecast that the Bank of England’s Monetary Policy Committee would opt to retain its current asset purchase target at 375 billion Pounds and leave the benchmark interest rate at the record-low of 0.5 per cent.
In light of the positive UK data released in recent weeks, including yesterday’s strong services report, it seems unlikely that the nine-member MPC will choose to expand stimulus and the expectation that Mark Carney’s first meeting as Governor of the BoE will go with more of a whimper than a bang caused the Pound to soften as European trade began.
The GBP/EUR exchange rate hit a low of 1.1699
As chief economist Keith Wade observed: ‘He’s come in with the promise of shaking things up, and it would be a letdown if he did nothing. A statement of intent would be a way of doing something when it’s too soon to be turning around the majority or changing the policy toolkit.’
Similarly, economist George Buckley noted: ‘When you get a new Governor you have to expect different things to be done. It may be that Carney thinks it’s appropriate to say what his thoughts are on his first outing. It could be the start of a new approach to policy decisions.
Another big piece of news which may impact the GBP/EUR exchange rate in the hours ahead is the European Central Bank’s rate decision. Investors are likely to take a particular interest in ECB President Mario Draghi’s economic statement due to his previous comments regarding fiscal policy remaining accommodative.
The BoE is due to deliver its rate decision at 11:00 am GMT.
Current Pound Sterling (GBP) Exchange Rates
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5248 <
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1733 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6731 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9594 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6558 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8523 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5971 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5101 <
(As of 10:00 GMT)
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