Sterling cautious as Dollar Dominates
Last week the US Central Bank provided the main source of influence over markets. Specifically, it was the more positive tone from its June meeting with two interest rate hikes expected by 2023.
In regards to specific rates, the EUR/USD fell from the $1.21 threshold to ending the week below the $1.19 mark. Similarly, GBP/USD moved lower, with the pair declining from $1.41 to finish the week down below the midpoint of $1.38-1.39 whilst GBP/EUR continued to trade between the range of 1.1555 and 1.1710.
Looking ahead to this week, the Bank of England is to hold its policy meeting on Thursday. However, with no policy changes envisaged it is expected to be less eventful than the Fed meeting and therefore is not anticipated to have much bearing on sterling. ECB President Christine Lagarde also speaks today and in light of the Fed’s action her comments will be more closely watched.