Sterling’s Value Rises Ahead of BoE Interest Rate Decision (Matthew Vassallo)

The pound set to make it a hattrick of daily gains versus the dominant dollar

Sterling’s value has risen during Wednesday morning’s trading, ahead of a host of key economic data releases over the coming days. GBP/EUR rates have once again spiked up, despite UK Services PMI data coming out worse than predicted this morning.

The EUR had made some inroads towards the end of last week but these gains have quickly been eroded, with Sterling once again moving back towards an 8 year high! With further rumours that Greece will not be able to meet their repayment deadline this month, we may find the spotlight back on the Eurozone sooner than some expected.

A report released by the National Institute of Economic & Social Research (NIESR) has predicted that global economic growth will slow again this year to the lowest rate seen since the financial crisis. Good news for the UK economy was that despite a cut in growth forecasts for both the US & Eurozone, the UK economies remained unchanged at 2.5%, further confirmation that our own economic recovery is on the right track. Due to the cut US growth forecasts we may find Sterling gains some value against the USD over the coming days, although generally global unrest with equate to a stronger USD, as investors will move their funds into safe haven currencies.

Looking ahead and we have a host of key data for the UK tomorrow, including the latest Bank of England (BoE) interest rate decision and subsequent minutes, which gives us a key insight into the relative health of our economy. We also have their quarterly inflation report and BoE governor Mark Carney’s speech, so expect additional volatility on Sterling exchange rates tomorrow.

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