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Poor day for Sterling on Thursday

• Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Inflation, Mark Carney, Sterling, UK, Uncategorised
• May 12, 2017
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Sterling fell to a one-week low against the dollar after the Bank of England’s inflation report showed interest rates were unlikely to rise within the next two years.

Although the BoE said it might need to raise rates before the late 2019 date market pricing indicated, that was nine months later than its February forecasts showed.

The BoE’s Monetary Policy Committee (MPC) voted 7-1 in favour of keeping interest rates on hold at their record-low 0.25 percent this month, quashing some bets that a second official would also support a rise.

Earlier on Thursday, data showing weaker-than-expected industrial output and a widening of Britain’s trade gap also weighed on sterling.

BoE Governor Mark Carney said sterling’s appreciation since Prime Minister Theresa May announced a June 8 snap election last month possibly reflected market expectations of a more orderly Brexit. Carney also said volatility is quite low in financial markets, but closer to historical averages in sterling markets.

It should be a quiet day for the pound as we have no data expected from the UK today.