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Sterling Is Dropping on Super Thursday

Sterling Is Dropping on Super Thursday

Sterling had an energetic start yesterday against the US and Euro by surging more than 0.5% by midday. Having topped out at 1.43834 against Euro, the Pound rescinded almost all gains made by market close.

Today, we have already witnessed the start of a new era of transparent decision making by the Bank of England (BoE). The aim of this is to minimise volatility when the UK interest rates are moved after an unprecedented length of time at historical lows.

In addition to today’s interest rate decision, details of voting for/against hikes, the Bank of England will also release the minutes from its previous meeting and most importantly of all, its Quarterly Inflation Report, which outlines the policy-makers’ longer-term views on the economy and monetary policy. Add to that a Q&A session and we’ll all be looking for a cup of tea and a sit down by mid afternoon.

Here are the salient points so far:

  • Interest rates have been held at 0.5%.
  • Only one member of the MPC Voted for a rate hike, taking the market by surprise. We were expecting at least 2 members to vote in favour of a rate hike.
  • Sterling has now lost over a cent against the US Dollar & Euro since the voting results were published at 12pm.
  • Mark Carney’s press conference will be dissected to try and determine the timing of any future rate hike.

And the major data release apart from the above will be the NIESR GDP Estimate at 3pm.

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