Market Insight
Daily Analysis: Bank Of England Expected To Hold Rates
Reece Dye
Head of Corporate Clients
Our daily analysis of EUR, GBP and USD.
GBP
- Eyes turn to the Bank of England at midday as they announce their latest decision on interest rates.
- While no cut is expected, the vote split and updated forecasts for growth and inflation, as well as Andrew Bailey’s conference will be picked apart.
- Markets currently see the initial rate reduction happening in June or August, and any hint towards either could see the pound under further pressure.
- GBP/USD remains pinned below 1.25.
EUR
- EUR/USD moves in a tight range this week with investors seeking safe-haven assets.
- Analysts currently favour a June rate cut with around 75-basis points of easing in 2024, far more than predicted for the Fed and BoE.
- Speeches from ECB policymakers today and tomorrow may take on added importance due to the lack of top tier EU data being released.
USD
- Souring market mood helps the dollar to make minor gains this week.
- Fed members have remained hawkish of late, citing concerns over easing monetary policy too soon, although the overall tone of the last Fed meeting was perceived as dovish.
- Similar to the eurozone, Fed speak will likely attract the interest of traders as we head towards the end of the week.
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