The Bank of England confirmed yesterday that they would be keeping interest rates on hold and the vote was split 7-2 in favour of keeping interest rates the same.
The Interbank level fell from 1.1450 to 1.1380 minutes after the announcement as some now feel that an interest rate hike may be a long time away from coming.
UK GDP data which came out a fortnight ago showed growth was at just 0.1% for the first quarter and this was one of the principle reasons for keeping rates on hold and this caused investors to sell off the Pound.
A potential interest rate hike was one of the main factors for Sterling’s strength against the Euro last month but since then the focus will turn back to what is happening with the Brexit talks which are still very uncertain.
ECB President Mario Draghi is due to speak this afternoon so any hints that there may be a change to the current monetary policy could see some volatility for GBPEUR exchange rates.
On Tuesday we are likely to see a very volatile start to the week as there are a number of economic data releases to watch out for.
We begin Tuesday with the release UK unemployment figures and at the same time Average Earnings are also due out. If average earnings show another positive reading then this could provide some support for a rate hike to come in the future and with UK Inflation Report Hearings due out at 11am we could see a lot of movement.
Also on Tuesday Eurozone GDP data is released at 10am so expect Tuesday to be the biggest day of movement for GBPEUR exchange rates.
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