Though higher, the Pound Sterling still remains not far from a 2½-week trough versus the US Dollar, with the slide a factor of last week’s Bank of England vote to maintain interest rates at the current low level. Previous to that decision, the Pound had been appreciating on expectations of a rate hike by the BOE, driven largely by the hawkish rhetoric of several members of the central bank’s monetary policy committee. Though those members did try to persuade the markets that an upward rate adjustment was still a likely possibility, markets interpreted the BOE’s downward growth and inflation revisions as decidedly dovish which have kept the Pound suppressed.
As reported at 11:35 am (BST) in London, the GBP/USD was trading at $1.3012, a gain of 0.17%; the pair had earlier hit a low of $1.29674 while the session peak stands at $1.30293. The EUR/GBP was down 0.18% and trading at 0.9027 Pence; the pair hit a session trough of 0.90090 Pence while the high is at 0.90563 Pence.
Next Week’s Data Key for Pound
Though this week’s data is unlikely to greatly impact the Pound’s direction, analysts point out that next week’s key data will be keenly scrutinized. Expected is CPI, wages and retail sales, due out Tuesday, Wednesday and Thursday, respectively. Analysts point out that if the numbers disappoint the market will perceive that as one more factor chipping away at the possibility of a 2017 rate hike, especially given that the increasing inflation rate didn’t sway the sentiment among the BOE members.