With the Bank of England’s upcoming policy meeting weighing on the Pound, the British currency declined despite positive UK data.
The Pound Sterling Exchange Rate was in the region of 1.5086 against the US Dollar as of 10:30 am
With the Dow Jones Industrial Average at a record high and risk-appetite broadly strengthening as a result of global economic developments, the safe-haven US Dollar posted declines against several of its most traded counterparts over the course of local trade.
However, despite yesterday’s stronger-than-forecast UK retail sales and services data providing an initial boost, the British Pound has also fallen.
Sterling slid against its American counterpart and the majority of its other most-traded currency rivals as investors anticipate the upcoming Bank of England policy meeting.
The Pound shed 0.3 per cent against the US Dollar and a modest 0.2 per cent against the Euro, despite this morning’s UK housing report revealing a price increase of 0.5 per cent in February.
The central bank will announce its latest rate decision tomorrow and will reveal what steps it intends to take next in an effort to boost economic growth.
The majority of economists are predicting that the central bank will up its asset purchase target, increasing it from the current level of 375 billion Pounds to a minimum of 400 billion Pounds.
As forex strategist Raghav Subbarao comments: ‘The risk, if there’s a surprise at all, is that there will be more asset purchases and that will weigh on Sterling. Our base case is that there won’t be any change in policy tomorrow.’
Over in the Eurozone Eurostat’s second estimate of fourth quarter GDP was shown to be unchanged from the 0.6 per cent quarterly decline previously estimated.
Comments are closed.