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Pound Sterling (GBP) Appreciates against Euro (EUR) as Bank of England (BoE) Shows No Signs of Interest Rate Cutting

  • Pound rallies as MPC worries are not realised
  • Speculation rife that BoE Gov Carney has broken neutrality
  • Euro worsens condition on poor Irish inflation
  • Eurozone GDP may outweigh scant UK announcements tomorrow

The Pound has executed a U-turn against its peers today, having jumped up against the Euro and other rivals by sizable amounts. This is on account of the BoE results; no MPC members voted for an interest rate cut, against earlier speculation.

Notably, a number of ‘In’ and ‘Out’ campaigners believed that BoE Governor Mark Carney had overstepped his bounds in commenting on instability caused by ‘Brexit’, which led to comments that he was ‘off the fence’.

The Euro has tanked across the course of the afternoon, due to a lack of further data compounding the disappointing outcome of Irish inflation rate results for April.


The Pound has been generally poor against the competition today, on account of widespread ‘Brexit’-induced BoE uncertainty.

The Euro has been a marginally more appealing prospect, although the morning’s domestic data has not been particularly supportive overall.

UK Economic News: BoE Jitters see Sterling Slide Overall

The Pound has failed to make widespread gains, on account of clear concerns that the BoE will bear bad news in the near-future.

The central bank is expected to announce its interest rate decision and inflation rate report today, in addition to Governor Mark Carney hosting a press conference in the immediate aftermath of the releases.

Generally, forecasts are non-existent for an interest rate hike today, although economist Shaun Richards has said:

‘It is not impossible that someone will vote for a bank rate cut at BoE today’.

Elsewhere, Carney is sure to be grilled on what he thinks the EU Referendum could mean for the UK economy before next month’s vote, although given recent domestic data, the policymaker is sure to be tested on his required impartiality on the subject.

Pound movements today have included gains of 0.2% against the Euro (GBP/EUR) and 0.3% against the Australian Dollar (GBP/AUD), while against most other rivals the Pound has made marginal movements.

Euro Unsettled after Eurozone Stats Outweigh Slight Greek Positivity

The single currency has been unstable overall so far, with losses consisting of -0.3% against the Canadian Dollar (EUR/CAD) and the Pound Sterling (EUR/GBP) along with -0.6% against the South African Rand (EUR/ZAR). A notable gain of 0.6% has been made against the Japanese Yen (EUR/JPY).

The Euro’s softness today is a symptom of its domestic data; the Eurozone industrial production results for March have been negative on the month and the year, which has greatly overshadowed the slight positivity caused by Greece’s unemployment rate for February falling from 24.4% to 24.2%.


Future GBP, EUR Forecast: BoE ‘Super Thursday’ Publications and ECB Speech to Provoke Volatility

In the coming hours, most investor focus is likely to be directed at the BoE and its announcements; the impact caused by the central bank’s comments may have an impact into the weekend.

Much later on in the day, European Central Bank’s (ECB) Vitor Constancio is scheduled to deliver a speech, which may alter the perceived value of the Euro.

Current GBP, EUR Exchange Rates

The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2667 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7895 today.