Bank of England interest rate decision due at midday
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Daily Currency Update
Today could see the first reduction in interest rates from the Bank of England since March 2020 when its latest policy decision is announced at midday. Over the past couple of weeks markets have raised the probability of a cut from around 30% to 60% and the pound has weakened as a result with GBP/USD falling from a one year high of around 1.3040 to under 1.28 as of this morning. Given the decision is far from clear cut the announcement should cause some volatility for the pound when announced, especially if no change is unveiled. The decision is accompanied with updated economic and inflation projections from the Bank and BoE Governor Andrew Bailey who is due to give a press conference at 12:30pm where markets will look for clues as to what lies in store re: rates for the rest of the year. GBP/USD is currently at 1.2795 with GBP/EUR at 1.1840.Key Movers
The US Federal Reserve kept interest rates on hold at 5.5% yesterday evening with Chairman Jay Powell lining up markets for a cut at its next meeting in September. The dollar lost some ground in the aftermath of the announcement given that a September cut now seems all but guaranteed, however the moves were fairly muted with EUR/USD rising from 1.08 to 1.0830 before unwinding those gains overnight. From the US we have ISM Manufacturing PMI numbers due at 3pm with the sector hoping the run of three consecutive worse than expected readings comes to an end. Tomorrow we round off the week with July's jobs data from the States. EUR/USD currently sits at 1.08.Expected Ranges
- GBP/USD: 1.2700 - 1.2930 ▼
- GBP/EUR: 1.1770 - 1.1915 ▼
- GBP/AUD: 1.9500 - 1.9725 ▼
- EUR/USD: 1.0730 - 1.0870 ▼