Blog

Market Update

• Posted by currencies in Bank of England, Bremain, Brexit, Currency, Dollar, Economy, election, EUR, GBP, Inflation, Mark Carney, No Deal, Prime Minister, Rate Cuts, Referendum, Sterling, UK, Uncategorised
• November 8, 2019
• No Comments

Sterling fell to a two-week low after two Bank of England officials unexpectedly voted to cut interest rates this month and others said they would consider a cut if global and Brexit headwinds did not lift.

The BoE said that its nine-member Monetary Policy Committee voted 7-2 to keep its key rate at 0.75%, in sharp contrast to forecasts in a poll for a unanimous decision.

So far, the central bank has resisted following the U.S. Federal Reserve and the European Central Bank in cutting rates in response to Brexit challenges and a global slowdown caused by a protracted U.S.-China trade war.

Thursday’s news took markets by surprise, pushing sterling down against its major rivals.

The big focus for currency traders is next month’s snap parliamentary election, with uncertainty on that front likely to weigh on the pound.

Moody’s is due to review Britain’s credit rating later in the day. Britain is currently rated Aa2.

The euro held steady today, though flirting with a three-week low against the dollar as the U.S. currency benefited from news that China and the U.S. had agreed to roll back tariffs as part of a potential preliminary pact to end their trade war.

China and the United States have agreed to roll back tariffs on each other’s goods in a “phase one” trade deal if it is completed, officials from both sides have said.