Bank of England MPC meeting highlights the day

21 June, 2018

Simon Eastman

Sterling managed to shrug off the fact there were no data releases yesterday, having spent the week so far, tracking lower across the board.

The main reason was less jittery markets following the Sintra meeting where Fed Chair Powell and ECB President Mario Draghi, both reiterated their most recent policy stances, while in the UK Theresa May saw off a Tory rebellion regards a key vote on the withdrawal deal over Brexit. As such, having traded fairly flat for most of the day, the pound rallied as the result of the close vote were announced, gaining nearly half a cent against the euro and over half a cent against the US dollar. EUR/USD remained fairly flat, trading in a half-cent range throughout the day, finishing as it started.

In other news, as Turkey heads towards probably the most important elections in their modern history this Sunday, the currency remains under pressure. As the country gears up to vote in the presidential and parliamentary elections the Lira remains weak against sterling, having moved nearly 6 percent since the start of June. For anyone with a current or future Lira requirement, its well worth locking in a deal now, be it on a spot deal or on a forward contract for those future requirements. Don’t forget, you can book your currency for up to two years with just 10 percent of the sterling equivalent, so speak to one of the team today for a quote.

Today is busier for the UK, with the last key release for the month in the shape of the Bank of England MPC meeting. We will see if any changes to the interest rate, plus policy summary and minutes of the recent meeting. We don’t expect any changes or adverse comments, so sterling may actually suffer off the back of the release, so anyone looking to move sterling into another currency might be wise to trade beforehand. Especially if the public sector borrowing figure at 9.30am comes out lower than forecast, the trend could already be set for the pound. Elsewhere, after lunch, the US release some jobs figures ahead of a speech my BoE chief Mark Carney this evening.