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The pound in for a rocky day

The pound in for a rocky day

The pound looks set for a volatile day on the back of the Bank of England’s inflation report out shortly. The MPC will provide us with explicit guidance on the path of bank rates going forward. Following the press conference the BOE is due to host a technical briefing with outside economists to provide more detail on how the guidance should be interpreted. The level of speculation is running high at the moment but if the inflation figures come in high we are likely to see more pressure on the pound throughout the day.

Members of the Fed spoke yesterday heightening expectations the FED will start tapering in September. Chinese inflation edged higher to 2.8% in July and we expect upcoming data to show a modest improvement in export growth but apart from that not much in the way of world news that’s going to impact Sterling in any way.

GBP/EUR presently trading down a little at 1.1525, GBP/USD holding up just over the 1.5300 and EUR/USD now at 1.3285.

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