GBP exchange rates recover from worst levels

The pound was able to firm against several of the majors on Thursday thanks to yet another comment from a Bank of England (BoE) official.

GBP/EUR advanced to €1.1363 from €1.1289, GBP/USD rallied from $1.2919 to $1.2964, GBP/AUD fluctuated between AU$1.6696 and AU$1.6773, GBP/NZD bounced back from NZ$1.7560 to NZ$1.7745 and GBP/CAD moved away from its recent lows to achieve C$1.6527.

How will the pound end the week? Keep scrolling to find out…

What’s been happening?

This week conflicting comments from various Bank of England (BoE) officials have been driving pound exchange rates.

While Sterling plummeted after Deputy Governor Ben Broadbent asserted that interest rates should be left on hold, the British currency was able to bounce back as Ian McCafferty stuck to his guns.

McCafferty stated that he hadn’t changed his opinion that interest rates should rise, and added that he felt the BoE should begin winding back quantitative easing in the near future.

McCafferty stated; ‘Given that other central banks are thinking about it, I think it would be remiss of us not to at least think about it. I think it’s a question that needs a bit of asking.’

The remarks helped GBP/EUR move away from an 8-month low.

Sterling was also able to rebound slightly against the Canadian dollar after plummeting on Wednesday.

While the Canadian dollar remains bolstered by the recent Bank of Canada (BoC) rate hike (and the expectation that interest rates are set to increase further) profit taking and fluctuating oil prices prevented CAD from consolidating its previous gains.

What's coming up?

UK data is in short supply today, and there's little to get excited about in the Eurozone either, with only the region’s trade balance numbers due to be released.

There’s quite a lot more going on in the US however, so we could see GBP/USD volatility before the weekend.

The US is set to publish inflation and retail sales figures for June, industrial and manufacturing production stats and the University of Michigan consumer confidence index.

Fed Chairwoman Janet Yellen recently indicated that easing consumer price pressures could prevent the Fed from increasing interest rates for a third time in 2017.

Consequently, if today’s US CPI report shows inflation dipping, the GBP/USD exchange rate could bounce higher.

We’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.

Phil McHugh,
Trading Floor Manager

Phil provides dealing and hedging services whilst also helping to manage Currencies Direct overall market exposure.