Will the Pound fall if the Bank of England stops hiking interest rates?
Last week, the Pound hit a six-month high against the Euro, and an 11-month high against the US Dollar after further interest rate hikes and bullish commentary from the Bank of England boosted the Pound.
The hike was the 12th consecutive interest rate hike from the Bank of England, which has come after a long period of very low interest rates just a few years ago.
The UK’s inflation issues have been well reported, and whilst inflation is also a global issue the UK appears to...
Sterling strengthens ahead of Bank of England interest rate decision
Sterling stronger ahead of Bank of England decision
2023 is turning into a positive year for the pound after a disappointing end to 2022. Sterling is the strongest performing major currency of the year and exchange rates remain elevated against many of its major counterparts.
Cable (GBPUSD) is trading close to one-year highs while GBPEUR hit a 2023 yearly high during yesterday’s session. The pound is also trading close to yearly highs against the Loonie (CAD), Kiwi, and Aussie.
What is driving sterling higher?
The pound has been...
Bank of England Interest Rate Decision – When should I buy or sell the...
Pound sterling poised for Bank of England meeting tomorrow
Tomorrow is the eagerly awaited Bank of England interest rate decision. Expectations are locked on for a 0.25% hike from the Bank of England.
This will take interest rates in the UK to 4.5% and could lead to volatility for pound sterling. Exchange rates can be heavily influenced by changes in interest rate policy as I have written previously.
GBPEUR has hit fresh highs at 1.15 which is a six-month high. GBPUSD remains near the 13-month highs of...
GBP exchange rates climb as focus turns to the Bank of England this week
The Bank of England is expected to increase the base rate of interest for the 12th consecutive time this Thursday, taking the base rate up to 4.5%.
An increase of 0.25% is expected, as the Bank of England continues its struggle to contain high inflation levels. Britain has the highest level of inflation within the G7 group of advanced economies and inflation remains above 10% despite the Bank of England targeting 2%.
Increasing interest rates often strengthen the underlying currency and this is a pattern we’ve...
Local elections cause movement for Pound vs the US Dollar
Pound Dollar rates hit highest level this year
The Pound US Dollar exchange rate has hit its highest level during 2023.
Sterling made gains vs the US Dollar following the news from the local elections showing that the Tories had lost a lot of seats overnight.
With the results still due to come out for many areas it will be interesting to see how this pans out.
Labour has so far gained a huge number as well as the Liberal Democrats compared to previous elections which is not...
Fed signals pause in interest rate hikes – will the ECB help or hinder...
The US Federal reserve announced last night that they would be raising interest rates for the 10th consecutive time. The move raised US interest rates by 25 basis points up to 5.25%, the highest level since 2007.
In general, interest rate rises can lend support to the value of the currency, however, the US dollar lost ground across the board following the Fed’s announcement. The Fed indicated that future interest rate rises could be limited given the potential restraint on the economy. Markets have digested...
Sterling in a strong position ahead of early May bank holiday
Economic data released at the end of last week showed positive and negative signals for the UK’s economic outlook. UK retail sales are down 3.1% year-on-year and 0.9% month-on-month. The monthly figure is worse than expected with markets expecting a negative reading of 0.5%.
PMI data showed some positive signs but was once again mixed. Services PMI trumped expectations of 52.9 with a reading of 54.9. However, manufacturing PMI was lower at 46.6 vs expectations of 48.5. A reading above 50 signals an expansion within...
Pound to Euro Rate Drops into the 1.12’s, hitting a 1-month low
Earlier in the month the GBP to EUR exchange rate was trading around the highest levels of 2023 so far, although since then, we’ve seen the Pound drop off and this morning the pair are trading in the 1.12’s.
The GBP/EUR pair climbed above 1.1450 at one stage, so in the space of just a few weeks there has been a gradual decline for the pair, despite the Pound climbing against some other major currency pairs.
Expectations of further interest rate hikes are now more likely...
UK inflation remains high – will the BoE give the pound a boost?
UK inflation remains high – will the BoE give the pound a boost?
Economic data released yesterday shows UK inflation (CPI) remains elevated above 10.1%. Forecasters were expecting inflation to fall to 9.8% following last month’s reading of 10.4%. The inflation reduction is positive for the UK and was largely driven by a fall in fuel and oil prices. However, food prices continue to rise as the UK consumer feels the squeeze of the continuing cost of living crisis.
Sterling exchange rates have remained relatively unchanged...
UK avoids recession – will the pound strengthen moving forward?
Pound Sterling has been range-bound against many of its major counterparts over the last two weeks. Most notably, GBPEUR which has traded within a cent from the high to low. Cable (GBPUSD) has traded within a 2-cent range and struggled to find support above the 1.25 handle.
The pound has strengthened in value due to the revised UK economic forecasts, however, it would seem the positivity has ended here for the pound and that new data will be needed to push the pound out of...
