9th February 2018 -The Bank of England statement was more hawkish than expected

 

     

The Bank of England statement was more hawkish than expected

Equity markets came under fresh selling pressure with sharp losses in New York as the Dow Jones index lost over 1,000 points. Chinese equity markets also declined sharply with the slide in risk appetite leading to fresh demand for the yen and Swiss franc.

Despite weak equities, global bond yields moved higher again as Federal Reserve officials continued to call for higher rates and played down equity-market losses. A solid dollar tone and risk aversion helped trigger downward pressure on oil prices.

The Bank of England statement was more hawkish than expected with comments that interest rates would need to rise earlier than expected previously. UK yields increased and Sterling moved sharply higher.

The Bank of England maintained interest rates at 0.50% with a 9-0 vote following the latest policy meeting which was in line with consensus forecasts. The bank upgraded its GDP growth forecasts slightly despite subdued consumer spending growth and a weak investment recovery with support from strong global demand.

The bank lowered medium-term inflation forecasts slightly, although it still expected the rate to be above target throughout the next two years. Overall, given a lack of spare capacity, the bank expected that interest rates would need to rise slightly earlier and by a larger amount than seen in November. Markets upgraded their rate projections with a hike fully priced in by August.Yields moved higher with the 2-year rate at the highest level since December 2015 and Sterling jumped after the release with a GBP/USD move above 1.4000 against while EUR/GBP retreated to lows near 0.8730.

The UK currency was unable to sustain the gains as a fresh slide in risk appetite and weaker equity markets triggered renewed selling. There were also reports of fresh tensions surrounding Brexit talks as GBP/USD dipped back 1.3900 while GBP/EUR rallied back above 0.1400. Yield expectations provided net support on Friday with GBP/USD back above 1.3950.

     
 
       
 

GBP/EUR 

– 1.1388

 
 

GBP/USD

– 1.3976

 
 

GBP/CHF 

– 1.3109

 
 

GBP/JPY 

– 152.49

 
 

GBP/AUD 

– 1.7957

 
 

GBP/NZD 

– 1.9368

 
 

GBP/CAD

– 1.7613

 
 

GBP/ZAR 

– 16.8978

 
 

GBP/NOK 

– 11.1219

 
 

GBP/SEK 

– 11.3348

 
 

EUR/USD 

– 1.2274

 
       
  All rates are indicative of interbank rates*  
       
 
 

GBP/EUR

 
 

GBP/USD 

 
 

EUR/USD 

 
       
 
   

09:30 GBP

UK Industrial Production (Y/Y)

-

2.50%

 
   

13:00 GBP

UK NIESR GDP Estimate

-

0.60%

 
   

13:30 CAD

Canadian Unemployment Rate 

6.00%

5.70%

 
   

16:45 GBP

MPC Member Cunliffe Speaks 

-

-

 
 
   
 
 
*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time.  CentralFX are not responsible for the rates shown.
 
 
 

Sign up to our newsletter

  1. Please tell us your name(*)
    Please use only alpha-numeric characters
    Please use only alpha-numeric characters
  2. Your Email(*)
    Please let us know your email address.
  3. Business / Personal(*)
    Invalid Input
  4. Please tell us a telephone number you can be contacted on(*)
    Please use only numbers and hyphens

Get in touch

CentralFX

3 Lloyds Avenue
London, EC3N 3DS

+44 (0) 20 7265 7979

info@centralfx.co.uk

We trade currency here. You can trade currencies too. Why not try our currency calculator and use our currency chart and currency economic calculator. Currency is everything here.We trade currency here. You can trade currencies too. Why not try our currency calculator and use our currency chart and currency economic calculator. Currency is everything here.We trade currency here. You can trade currencies too. Why not try our currency calculator and use our currency chart and currency economic calculator. Currency is everything here.

.We trade well business here. You can trade business too. Why not try our with business and use our business chart and business economic. business is business here.

We use well business use here. You can trade with great use. Why not use our with use and use our business chart and use economic. business us business use.We use well business use here. You can trade with great use. Why not use our with use and use our business chart and use economic. business us business use.We use well business use here..

Why not trade with our trade and use our trade chart and trade economic.You can trade as we trade too. Why not trade with our trade and use our trade chart and trade economic. trade is trade here.We trade well trade here. You can trade as we trade too. Why not trade with our trade and use our trade chart and trade economic. trade is trade here

.We centralfx well centralfx here. You can centralfx as we centralfx too. Why not trade with centralfx our centralfx and use our centralfx chart and centralfx economic. centralfx is centralfx here.We centralfx well centralfx here. You can centralfx as we centralfx too.