Yesterday we saw ADP Employment Change figures released in The US for January, with 183,000 extra jobs being created from previously. This was an extra 33,000 than forecast and brought further strength to The Dollar, ahead of the eagerly anticipated Non-Farm Payroll.
Pound Sterling’s recent reprieve is set to be short-lived today once The Bank of England set in motion a path of interest rate cuts, to help aid a slowing economy. A 25 basis-point cut is pretty much fully priced in for this afternoon, with eight of the nine committee members expected to back a cut. The downward pressure on Sterling will more than likely come from forward guidance after this decision, with The Bank of England set to commit to a further three rate cuts throughout 2025. Ultimately sticking with their quarterly rate cut cycle.
The Bank of England are also set to release new economic forecasts which suggest further troubles ahead economically, with a cut to growth projections and a rise in unemployment forecasts which will no doubt provide further consolidation that more interest rate cuts are needed. All of this combined could weigh heavily on The Pound throughout the day.
Sticking with Central Banks and rate decisions, we’ve seen the Japanese Yen strengthen to its highest level in two months as it now looks increasingly likely that The Bank of Japan will hike its rates from 0.5% to 1% in the second half of this year. Tamura, who is a member of the rate setting board expressed concern that sharp increases in rice prices and inflation exceeding 2% for almost three years consecutively has damaged consumer consumption.
GBP/EUR 1.1999 GBP/USD 1.2428 GBP/AED 4.5697
GBP/AUD 1.9869 GBP/CHF 1.1245 GBP/CAD 1.7855
GBP/NZD 2.1991 EUR/USD 1.0349 GBP/ZAR 23.1741