Foreign Exchange Daily Market Update 14/07/2016

Thu, July 14, 2016

Pound rises ahead of BOE’s first rate decision since Brexit vote 

The Pound strengthened ahead of the Bank of England’s first interest-rate decision since the U.K. voted to leave the EU.

Sterling strengthened its highest level in more than a week against the Dollar. The Pound rally came even amid rising speculation that the central bank will cut its benchmark rate for the first time since 2009 to support the U.K. economy from the fallout of Brexit.

Since the June 23 vote, sterling fell to its worst day on record, the Pound tumbled to the lowest level since 1985 last week, before gaining some of that ground as it became clear a new leader would take power earlier than previously thought. It’s still 11 % lower since the nation opted for Brexit.

The Pound rose 0.6% to $1.3225 this morning, having touched $1.3338 against the Dollar on Wednesday, the highest since July 4. Sterling also strengthened 0.5% to €1.193 against the Euro.

The BOE’s decision will be the first since the U.K. historic vote to leave the EU. Mark Carney Bank of England Governor said shortly after the referendum that monetary easing would probably be needed over the summer, which left many to speculate on the timing of the move.

The Pound rose since Thursday up to Tuesday against the dollar as it became clear that Theresa May would replace David Cameron as the Prime minister, ending a period of political instability that has lasted since Britain voted to leave the Euro zone. The former Home Secretary took office Wednesday evening

Data to look out today.   

12:00 GBP Uk Bank Rate decision.

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