Will BoE speeches impact the pound?

GBP/EUR was trading in the region of €1.1312 (up from a low of €1.1289), GBP/USD dipped to $1.2861, GBP/AUD slid to AU$1.6892, GBP/NZD rallied to NZ$1.7836 and GBP/CAD held steady at C$1.6616.

Will the BoE lift the pound today? Keep scrolling to find out…

What’s been happening?

We had a fairly dull start to the week, with a lack of exciting news limiting pound movement for much of Monday.

The Eurozone Sentix investor confidence measure had little impact on the euro, having eased slightly from 28.4 to 28.3, while the US labour market conditions index dipped from 3.3 to 1.5.

An impressive like-for-like sales report from the British Retail Consortium (BRC) gave the pound a little lift on Tuesday.

The data revealed that (on a like-for-like basis) UK retail sales increased 1.2% in June year-on-year, beating forecasts for an increase of 0.8%.

Although growth in sales remains below both the 6-month and 12-month averages of 1.4%, the result was still a marked improvement on May’s figure of -0.4%.

Chief Executive of the BRC Helen Dickinson commented; ‘The arrival of summer provided a welcome pick-up to sales growth in June, particularly to non- food categories which saw a reversal in fortunes after a prolonged period of sluggish growth. Leisure pursuits and activities spurred consumer spending on summer clothing, beauty products and outdoor toys’.

However, she did go on to voice concerns over whether the spending momentum will last in the face of rising inflation and slowing wage growth.

What's coming up?

Today we’ve got speeches from two Bank of England (BoE) officials to contend with.

Chief Economist Andy Haldane is up first, and if his comments mirror those made last month they could send the pound higher.

Haldane caused something of a stir back in June when he ditched his normally highly cautious approach and hinted that he was on the verge of voting for higher interest rates.

The pound benefited when Haldane asserted; ‘Having weighed the evidence, I think that the balance of risks associated with tightening 'too early', on the one hand, and 'too late', on the other, has swung materially towards the latter in the past six to nine months.’

His speech will be followed by one from Ben Broadbent, Deputy Governor for Monetary Policy. As Broadbent has yet to comment publically on his views about interest rates since the last split vote, his remarks will be of particular interest.

The only other economic news on the calendar today is Canada’s housing starts report. Housing starts are believed to have increased in June, but with Canadian dollar movement largely being driven by Bank of Canada (BOC) rate hike expectations, the result is unlikely to have too much influence over the ‘Loonie’ unless it deviates considerably from forecasts.

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.