Foreign Exchange Daily Market Update 03/08/18

Fri, August 03, 2018

Pound Slumps After Bank of England Raises Rates.

Sterling fell after the Bank of England failed to convince markets of a brighter economic outlook.

The BOE surprisingly voted unanimously to raise the benchmark interest rate by 25 basis points to 0.75% and suggested further increases. Still, sterling fell to its lowest since July 20 as carney signalled the pace of further hikes would be gradual and markets questioned the rationale for tighter policy when the U.K.’s exit from the European Union is still caught with uncertainty.

It is extremely hard for the BOE to convince the market that it may hike rates again when everyone knows there hasn’t yet been a Brexit deal. It is unlikely that we may see another hike in the coming months, Sterling remains very vulnerable to political uncertainty

Sterling failed to shake off its blues, as the markets have priced in the next rate increase as late as September 2019 and policy makers see inflation remaining contained within the 2% target through 2021.

Sterling fell by as much as 0.9% to $1.3016, but some analysis still sees the pound rising to $1.3400, Sterling fell to 1.1119 against the Euro.

• Sterling slides to lowest since July 20 even after rate hike
• Carney says policy ‘needs to walk, not run, to stand still’

Data to look out today.   

13:30 USD Non – Farm payrolls  

CURRENCY PAYMENTS MADE SIMPLE

PRESS RELEASE

KBRFX was mentioned in the Essex Chronicle for the top 100 companies by turnover in Essex http://www.essexchronicle.co.uk/100-Essex-businesses-revealed-annual-survey/story-25140555-detail/story.html

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