Sterling has continued its fall off from 1.37 against The Dollar and 1.16 against the Euro as investors and traders position themselves ahead of this afternoon’s Bank of England interest rate decision. The expectation is that rates are kept unchanged this afternoon, but there seems to clearly be a stronger feeling that The Bank of England will highlight their aim to reduce rates further come March, which has contributed to these moves on the markets.
Moving away from the economical front, uncertainty around Sir Keir Starmer staying in his position as Prime Minister is coming under further scrutiny as he is seemingly losing support from Labour after his admissions and knowledge around Mandelson’s links to Epstein. The increasing loss of support has ramped up rumours Sir Keir Starmer will struggle to see it through until May – with a possible fallout seeing David Lammy come in to contend a leadership contest before a General Election. All of this uncertainty is ultimately damaging Sterling.
Keeping with Central Banks, The European Central Bank is also expected to keep their rates unchanged so apart from any potential indicators for future cuts it could be a non-event.
At the top of the hour, we have December’s Retail Sales for Europe with figures suggesting a decline which shouldn’t come as a surprise, especially when we consider that inflation has now dropped below The ECB’s target of 2%. Both releases coming in negatively would support the notion that there is currently less consumer demand and potentially pave the way for future tax cuts in order to stimulate the economy through consumer spending.
This afternoon we have the weekly job’s release in The U.S, again not looking overly positive with an expected further 3,000 claims submitted. The number of continuing jobless claims spanned over the past few weeks is also expected to rise from 1.82m to 1.85m.
GBP/EUR 1.1497 GBP/USD 1.3556 GBP/AED 4.9850
GBP/AUD 1.9450 GBP/CHF 1.0543 GBP/CAD 1.8569
GBP/NZD 2.2658 EUR/USD 1.1776 GBP/ZAR 21.8938