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Pound Euro Exchange Rate Surges as BoE Could Start Raising Interest Rates in Early 2022

Pound (GBP) Strengthens after BoE Hints at Hawkish Policy

The Pound (GBP) firmed yesterday as hawkish comments from Bank of England (BoE) policymaker Gertjan Vlieghe boosted Sterling and sparked a surge in the Pound Euro exchange rate.

Vlieghe said that the BoE could raise interest rates as early as the first quarter of 2022, though a decision will depend on post-furlough unemployment and continued economic growth.

With no notable upcoming data releases in the UK, domestic coronavirus news is likely to exert the greatest influence over GBP exchange rates for today’s session.

Euro (EUR) Weakens following ECB Inflation Comments

The Euro (EUR) slipped yesterday following dovish comments from European Central Bank (ECB) policymaker Pablo Hernandez de Cos.

De Cos reiterated the ECB’s dovish stance saying that the rising inflation rate in the Euro area is ‘transitory’, which dampened demand for the single currency.

Turning to today, the Eurozone’s economic sentiment index beat expectations, rising to its highest level in over three years. Could this give EUR exchange rates a boost?

US Dollar (USD) Muted amid Mixed Data Releases

The US Dollar (USD) dipped over the course of yesterday’s session following mixed economic data releases.

The latest US GDP price index beat market forecasts, as did the fall in new jobless claims. However, April’s durable goods orders showed a surprise decline in new orders – the first decline in almost a year – amid supply shortages.

Looking ahead, the latest PCE price index is expected to confirm a sharp rise in US inflation last month. Any positive USD news may be offset by the personal income and spending data releases, which are forecast to show a fall in personal income and a slowing of personal spending.

Canadian Dollar (CAD) Firms despite Modest Fall in Oil Prices

The Canadian Dollar (CAD) unexpectedly strengthened yesterday, despite a modest decline in oil prices. Perhaps CAD investors are expecting demand for oil to continue rising in the long term, as more restrictions are lifted.

Australian Dollar (AUD) Burdened by Coronavirus Outbreak

The Australian Dollar (AUD) remained subdued overnight, with the recent announcement of a one-week lockdown in Victoria state still weighing on the currency.

New Zealand Dollar (NZD) Dips amid Improving Market Mood

The New Zealand Dollar (NZD) slipped slightly in overnight trade, following a dwindling appetite for risk among investors.