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Pounding of The Pound

Pounding of The Pound

Super Thursday lived up to its billing yesterday as Sterling became the subject of relatively painful losses across the board. This came following the interest rate decision from the Bank of England (BoE), along with the quarterly inflation report and BoE Governor, Mark Carney’s speech.

The eagerly anticipated data disappointed all but mortgage holders in the UK as it was revealed that the interest rate is going to stay at 0.5% for the 77th consecutive month. The vote, however, did reveal a split among the committee for the first time this year. One member voted in favour of a rake hike of an additional quarter of a percent, versus the opposing eight who voted to keep things on hold for the time being. Analysts had suggested that they expected two or perhaps even three members to break rank, adding weight to Mr Carney’s claim that a rake hike will occur by the turn of the this year.

GBP recorded immediate losses of 0.7% versus the Dollar and 0.6% versus the Euro – throughout the afternoon the trend continued with the pairs reaching interbank lows of 1.5465 and 1.4186 respectively.  This was despite UK GDP forecasts revised up to 2.8% from 2.5% previously.

Today the focus will firmly be on employment data from the US. So far this year stateside labour figures have been strong with many expecting this to continue. Unemployment remains in line with target, heading in the right direction whilst non-farm payrolls has sprung some impressive surprises which have been welcome news to the Dollar bulls out there. The release will be eagerly awaited, especially with the apparent imminent interest rate rise by the Fed. The Dollar dominance is forecast to continue and this afternoon’s release could prove to be another key element.

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