Latest news with #GBPUSD
Business Standard
13 hours ago
- Business
- Business Standard
GBPUSD reclaims $1.35 mark; Bank Of England stands pat on rates
The British pound extended sharp upside on Friday tracking mild weakness in dollar amid lack of activity as US markets were closed on June 19 in observance of Juneteenth. Meanwhile, Bank of England yesterday decided to keep interest rates unchanged after cutting it by a quarter-point last month. The Monetary Policy Committee voted 6-3 to hold the Bank Rate at 4.25%. Three members preferred to reduce the rate by 25 basis point. The central bank noted that there has been substantial disinflation over the past two years, as previous external shocks have receded, and as the restrictive stance of monetary policy has curbed second-round effects and stabilised longer-term inflation expectations. This has allowed the MPC to withdraw gradually some degree of policy restraint, while maintaining Bank Rate in restrictive territory so as to continue to squeeze out existing or emerging persistent inflationary pressures. For the day, investors await UK retail sales for May. Nevertheless, broad strength in dollar amid the ongoing Middle East turmoil could also limit gains the counter. GBPUSD is currently quoting higher by more than half a percent on the day at $1.3502. On the NSE, GBPINR futures are up 0.33% at 116.87.
Business Standard
a day ago
- Business
- Business Standard
Dollar index at one-week high as Fed holds rates steady; safe haven demand supports
The dollar index accelerated further gains to hit a one-week high on Thursday after the US Feds decision to keep the policy rate unchanged at the 4.25%4.50% range at its June meeting on Wednesday. Fed Chair Jerome Powell signaled, in a post-meeting press conference, that inflation remains somewhat above goal and could rise in the future, citing the impact of US President Donald Trumps tariffs. However, the central bank expects to cut the rates two times, as indicated by the dot plot. Meanwhile, the greenback also draws support from safe haven demand amid heightened Middle East tensions. The dollar index that measures the greenback against a basket of currencies is quoting at 98.60, up 0.14% on the day. Among the basket currencies, EURUSD and GBPUSD are trading lower by around 0.1% at $1.1528 and $1.3410 respectively.
Yahoo
a day ago
- Business
- Yahoo
Bank of England expected to hold interest rates as inflation comes in above target
The Bank of England (BoE) is widely expected to keep interest rates on hold at 4.25% this Thursday, as policymakers weigh rising geopolitical risks, persistent inflation, and conflicting domestic economic data. The Monetary Policy Committee (MPC) will announce its decision on Thursday, and markets are betting that it will maintain its 'gradual and careful' approach to easing policy. Since August 2024, the BoE has reduced rates four times amid stubborn inflation and resilient wage growth. However, divisions have emerged within the committee. May's meeting revealed a more fractured consensus, dampening expectations of a faster pace of rate cuts. A subsequent batch of weaker domestic data has since revived speculation that the MPC may slow down its pace of lowering borrowing costs. 'This month's Bank of England policy meeting should be as straightforward a decision [to leave rates unchanged] as they come,' said George Buckley, economist at Nomura. 'We continue to look for 3.5% terminal rates by February next year — i.e., three 25bp cuts at Monetary Policy Report meetings. We think that the settling point would be at the upper end of the neutral range. This is a modestly quicker cutting cycle than the market sees.' Read more: Are UK investment assets becoming more attractive? Have your say The central bank faces a complex global and domestic backdrop. Rising oil prices (BZ=F) following Israeli airstrikes on Iran have reignited fears of broader conflict in the Middle East, compounding volatility already driven by US president Donald Trump's shifting trade policy. Meanwhile, sterling (GBPUSD=X), has strengthened sharply against the dollar, further complicating the inflation outlook. Domestically, the picture remains uncertain. The UK economy contracted by 0.3% in April, reversing earlier growth. Wage growth slowed markedly in the three months to April, and the unemployment rate ticked higher, raising questions about the underlying strength of the labour market. Inflation, however, remains a central concern. Consumer price inflation slowed down to 3.4% in May but remains well above the BoE's 2% target. NIESR associate economist Monica George Michail said: 'We forecast inflation to remain above 3% for the remainder of the year amidst persistent wage growth and the inflationary effects from higher government spending. 'Additionally, the current tensions in the Middle East are causing greater economic uncertainty. 'We therefore expect the Bank of England to keep rates on hold this Thursday and implement just one further cut this year.' Suren Thiru, economics director at ICAEW, said: 'May's dismally modest drop is unlikely to quell concerns over inflation, as it owed more to the unwinding of distortions caused by Easter falling in April this year, particularly on services prices, than a telling reduction in cost pressures.' He added: 'An interest rate cut on Thursday looks implausible as rate setters will probably want to hold off until August to get a better understanding of the impact of this global uncertainty before taking the plunge once again.' Sarah Coles, a personal finance columnist at Yahoo Finance UK and head of personal finance at Hargreaves Lansdown, said: 'If inflation figures don't hold any surprises, interest rates are held, and expectations stick for two more cuts this year, we could well see rates fall again.' Paul Dales, chief UK Economist at Capital Economics, said that April's GDP contraction 'won't prompt the Bank of England to cut interest rates next Thursday. But it is one more piece of news pointing to another cut in August'. Sanjay Raja, chief UK economist at Deutsche Bank, shared a similar view: 'We expect the Monetary Policy Committee (MPC) to keep Bank Rate unchanged at 4.25% on 19 June. But increased concerns around the labour market are likely, in our view. Global risks in May are likely to give way to domestic risks in June. And we expect the MPC to open the door to an August rate cut. Read more: UK inflation slows to 3.4% in May as transport costs ease 'We stick to our call for three quarter-point rate cuts this year (Aug, Nov, Dec) and one final rate cut in February, taking the Bank Rate to 3.25%.' Others are also anticipating a summer move. Enrique Diaz-Alvarez, chief economist at Ebury, said: 'Against this backdrop, the Bank of England is expected to hold rates steady this week, but absent a strong inflation report, the MPC may well signal that the next cut could come in the summer. "This may come in the form of a tweak to the bank's hawkish bias or the voting pattern, with the possibility that two or three officials vote for an immediate cut on Thursday. ING analysts also flagged August as the likely next move. 'Barring big surprises in the data over the next month, we think the latest disappointing jobs numbers help cement an August rate cut," they wrote. "Bear in mind that at 4.25%, the bank rate is still very much in restrictive territory, which offers the Bank plenty of scope to keep lowering it. We expect a further cut in November and two more moves in 2026, taking the terminal rate to 3.25%.' However, not all market participants are convinced Threadneedle Street will act soon. Read more: UK economy shrinks by 0.3% in April 'While the broader trajectory for rates remains downward, the path ahead now looks shallower than previously anticipated,' said Steve Matthews, investment director for liquidity at Canada Life Asset Management. 'Market pricing suggests the next move is unlikely before September, and possibly later. Added to this, uncertainty around US tariffs and trade policy is creating a more cautious global backdrop — no one wants to make a move prematurely.' Across the Atlantic, all eyes will be on the US Federal Reserve, which is widely expected to leave interest rates unchanged at its meeting on Wednesday. Investors will be closely watching updated economic projections, seeking clues as to how heavily policymakers are factoring in recent signs of economic softness and the degree of concern around ongoing trade uncertainty, unresolved fiscal negotiations, and the growing risk of conflict in the Middle East. The Bank of England is set to announce its latest interest rate decision at midday on Thursday 19 June. Read more: Average UK house asking price drops by more than £1,000 Why you can trust an 18-year old with their junior ISA – and how to create one BT CEO hails the UK as 'phenomenal' for tech unicornsError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Standard
3 days ago
- Business
- Business Standard
GBPUSD attempts recovery from 3-week low; UK Inflation awaited
The British pound is attempting recovery from a three week low against the dollar on Wednesday, following an over 1% fall in the previous session. Yesterdays sharp decline was in tandem with dollar spike that was driven by safe haven demand amidst ongoing geopolitical turmoil in Middle East. Meanwhile, FOMC decision scheduled this week is also keeping the greenback supported to some extent. The dollar index that measures the greenback against a basket of currencies was gave up yesterday sharp gains and was quoting at 98.24, which contributed to upside in the counter. GBPUSD is currently quoting at $1.3448, up 0.09% on the day. Meanwhile, investors will closely watch UK inflation data for May due for the day that will help determine BoE monetary policy decision slated for later this week. On the NSE, GBPINR futures are trading lower by 0.76% at 116.10.
Business Standard
13-06-2025
- Business
- Business Standard
GBPUSD reverses course from an over 3-year high; Dollar gains support on safe haven demand
The British pound is erasing gains from an over a three-year high on Friday tracking a good rebound in the dollar overseas. Market sentiments turned sour following heightened geo-political tensions in the Middle East, providing some respite to the safe haven dollar to revive from a three year low. Investors were led to dollar amid heightened geo-political tensions in Middle East after media reported that Israel has launched unprecedented attack on Iran, targeting the heart of nations nuclear program and senior military leaders. The move plunges the Middle East into fresh uncertainty with the real risk of a wider regional war now breaking out. However, growing uncertainty over US trade policy after President Donald Trump threatened to impose unilateral tariffs and increasing bets of Federal rate cut following softer inflation data from US continues to add pressure on the greenback. The dollar index that measures the greenback against a basket of currencies is quoting at 97.90, up 0.45% on the day. GBPUSD pair was trading at $1.3553, down 0.37% on the day. However, on the NSE, GBPINR futures are up 0.30% at 116.63.
