Blog


Market Update

November has opened trading with the GBP having retraced gains from an incredibly strong month. Investors and traders priced in an interest rate hike from the Bank of England this side of the new year in the last 2 weeks of trading. The GBP had reached highs against the US Dollar, Euro and a basket of other currencies. Although an interest rate hike is not yet completely confirmed; this weeks focus and attention will be on Bank of England interest rate decision on Thursday 4th November. With inflation rising above the bank of England’s target of 2%, a hike would curb inflation. However, is the UK ready to raise interest rates as we approach the winter season and uncertainties surrounding Covid-19?

Should the nine members of the Monetary Policy Committee (MPC) vote unanimously for an interest rate hike; we should in theory see the GBP continue its strong run against the US Dollar, Euro and other currencies. In the scenario where members of the MPC vote against an interest rate hike this month, we can expect the Pound to further retrace gains made in the last couple of weeks of October. Whether or not and interest hike does prevail this month; comments made by the Bank of England and MPC in the Meeting Minutes will be closely watched and any forward guidance or indications will fuel investors and traders appetite for November trading.

Across the Pond, the United States also have their interest rate decision on Wednesday and, unlike the UK, the US are not forecasting any rate hikes. The markets will be keeping a close eye on the decision and more so if the US decide to being tapering. Thus far, rising inflation in the US is being looked at as transitory and therefore no urgent stance to raise interest rates. If the US do decide to taper and reduce its asset purchasing, we could well see the US Dollar strengthen. No changes to asset purchasing could keep the US Dollar stable with attention turning towards the Meeting Minutes.

Leave a Reply

Your email address will not be published. Required fields are marked *

What's Going On?

Currencies 4 You Ltd is a company registered in England and Wales (registered no. 06866898). Registered office: Regus House Victory Way Admirals Park, Crossway, Dartford, Kent, DA2 6QD. Currencies 4 You Ltd Payment and Foreign Currency Exchange Services are provided by Currency Cloud Limited, Equals Connect Limited and Ebury Partners UK Limited. Currency Cloud Limited. Registered in England No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money. FCA registration number: 900199. Payment Services are provided by Equals Connect Limited, registered in England and Wales (registered no. 07131446). Registered Office: Vintners’ Place, 68 Upper Thames St, London, EC4V 3BJ. Equals Connect Limited are authorised by the Financial Conduct Authority to provide payment services (FRN: 671508). Currencies 4 You Ltd is partnered with Ebury Partners UK Limited as its Programme Mananger. Ebury Partners UK Limited are authorised and regulated by the Financial Conduct Authority as an Electronic Money Institution. (Reference Number 900797). Ebury Partners UK Ltd is registered with the information commissioners office with registration number: ZA345828. | Terms and Conditions | Privacy Statement | Careers