Bank of England meets tomorrow

By Luke Dyson

We have seen quite a volatile couple of days for sterling, although now back into its current rangebound market having previously broken out below last week. Having broken out below now fully opens the door to downward movement as the support level is extremely weak, if a stimulus was to drive sterling down.

Moving forward, we have a significant week for sterling currency pairs as the Bank of England have their interest rate decision on Thursday 2nd of Nov at 12:00 noon, this could have a drastic impact on the rates depending on what the final vote is.

If the overall consensus is to keep rates the same, this may not impact the market as it is expected, and more than likely already priced into the market.

Regarding the euro at present, we have seen some very positive financial moves with inflation now below 3% , coming in at 2.9% for all of the eurozone. Now comfortably below the level of 3.1% anticipated, with suggestions from the ECB that they will begin to rate cut early 2024.

The impact of inflation on the market is a positive one for the euro, however the rate cuts moving forward my not follow this trend.

Typically a hike would boost the base currency’s strength, however in recent times this has had a different effect and in fact has been the opposite. Until these rate cuts have been implemented nobody knows what the outcome could be.

For USD we have seen a massive amount of movement over the last few weeks, with now two wars in progress. Both Ukraine-Russia ongoing and as of more recent times the Middle East conflict. This has significantly boosted the strength of the Dollar, now making the GBP/USD rate very weak compared to previous months.

We also have the Fed’s interest rate announcement later today at 18:00 UK time, depending on the outcome of this we could also seen further gains made for the Dollar.

As it stands there are significantly more positives for the dollar and euro at present, which leaves sterling in a place of uncertainty.

If you have any up and coming currency requirements please don’t sit back on the hunch you feel the market will automatically get better. Get in touch with A Place in the Sun Currency today to see what we can do to assist or even help get a strategy in place to limit your risk .