Pound Pressured Ahead of BoE Speech

Wednesday, 11 July 2018 11:46

Cautious investors kept the Pound Sterling under pressure ahead of a speech from Mark Carney, the head of the Bank of England. Also weighing on the currency is the recent resignation of two members of the Prime Minister's cabinet, specifically David Davis and Boris Johnson, either of whom could pose a challenge Theresa May for the leadership position. Markets are wondering how the BoE Governor will lay out his plans for a tighter monetary cycle, especially given the uncertainties of the UK government. In comments he made just last week, Carney sounded upbeat on the Pound's outlook, and FX traders will look to see if he continues in that vein or if he now backtracks.

As reported at 11:22 am (BST) in London, the GBP/USD was trading at $1.3241, down 0.26% and off the session trough of $1.3234; the high for the trading day is recorded at $1.3285. The EUR/GBP is trading at 0.88461 Pence, up 0.07%; the pair has ranged from 0.88298 Pence to 0.88521 Pence in the trading day.

Traders Eye Bank of Canada Decision

In Canada, markets will be expecting news of a rate hike from the Bank of Canada later today. Economists recently polled have priced in a 25 basis points rise in the central bank's lending rate, from the current 1.25% to 1.50%. The BOC's monetary policy report and statement will be issued at the same time as the decision. While the vast majority of those polled believe a rate hike is going to occur, there are those who believe that bank may wait to see what the recently imposed export tariffs could do to the Canadian economy. The USD/CAD was trading at C$1.3163, up 0.2521%; the pair has ranged from C$1.31288 to C$1.31743 in the trading session.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.

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