GBP exchange rates have begun the day on the front foot after some positive comments from Bank of England Governor Andrew Bailey yesterday evening.
He stated that hiking interest rates again remain a tool at the Bank of England’s disposal to tackle rising inflation.
Last week it emerged that UK inflation levels surprisingly remain above 10%, when markets had forecast a fall below this threshold for the first time since August last year. This pushed GBP exchange rates higher as the chances of additional interest rate hikes increased as a result of the surprisingly high inflation levels.
The comments from Governor Bailey last night tie into this expectation, so his comments underlining the potential for additional hikes have unsurprisingly pushed the Pound slightly higher.
Governor Bailey also reiterated his faith in the UK banking system and claimed that it’s ‘resilient’ and that this will allow the BoE’s monetary policy to focus on tackling the high inflation levels. The BoE’s target is 2% so the current rates above 10% are in focus, especially as the cost-of-living crisis has become such a talking point when discussing the UK economy.
There are no major economic data releases due out today for the UK although Friday has the potential to be a busy day, due to the raft of economic data releases due out. UK GDP figures will be released early in the morning, along with German Retail Sales figures and Employment data. EU Inflation will also be released at 10am which could influence GBP/EUR exchange rates, and in the afternoon there will be some data releases out of the US so it could be a busy end to the week for currency markets.
If you would like to discuss an upcoming currency exchange involving the Pound, please feel free to get in touch with me (Joe) on [email protected]
We will be happy to offer quotes and explain the different contract options our currency brokerage offers, and look into the upcoming economic releases which could impact the currency markets.