Bank of England dust not settled, markets remain volatile

10 November, 2015

Matthew Boyle

This week has yet to see the dust settle after the big pieces of news we have seen recently released. Last week the big news was that the UK will not raise interest rates seemingly for some time, as the rise is now more heavily linked with inflation levels. As such this saw a spell of weakness for the pound and to a large extent has changed the recent fortunes of the major pairings – GBP/EUR and USD. In the latter end of the week we also saw surprise US non-farm payroll figures, which combined with the news from the UK allowed the USD to make significant gains against both the pound and the single currency – gaining 4 cents and 2 cents respectively in around the last week. Certainly this news has seen a shift in the market with the USD currently the strongest, with the allure of their own hike in the coming months encouraging investment in the greenback.

Yesterday was a fairly quiet day as no major Ecostats were released. As such is was a fairly stagnant day with rates up and down within a tight range – unsurprising given the lack of data and large movements we have seen in the last weeks. Today however this may change as we have at 9am the Bank of England inflation report. Given Carneys comments about the strong link between this figure and interest rates any dovish attitude here could see further losses for the pound as the realisation continues to sink in that there will be no hike in Spring.

Later in the afternoon we also have import and export data from the US but it will undoubtedly be the UK morning data that sets the tone of the day.

With rates currently so volatile and ahead of important upcoming releases this week, should you have any imminent transfer requirements give Currency Index a call today and speak to your personal Currency broker, who can give you some friendly and professional guidance on how to get the most out of your transfer.