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Just how dovish will the BoE be today?

business-articlesJust how dovish will the BoE be today?
  • Cautious comments from Carney to weigh down the pound?

  • Will a steady Eurozone unemployment rate buoy the euro?

  • Will a decreased possibility of a US rate hike cause the US dollar to fall?

Dovish comments to drag down pound?

As MPs returned from their recess yesterday and with the date for the meaningful vote set for 15 January, the focus has shifted back to Brexit, which remains the main catalyst for pound movement.

This afternoon will see a speech from the Governor of the Bank of England, Mark Carney, which depending on whether his tone is hawkish or dovish, could cause pound movement.

Eurozone unemployment could buoy euro

The euro slipped against the pound over the course of yesterday morning as December’s business climate fell further than expected.

With the Eurozone unemployment rate due to be released this morning, the euro may be able to regain some of its recent losses.

If the unemployment rate for the Eurozone holds steady at a rate of 8.1%, as expected, the euro could make gains on the major currency pairings.   

FOMC minutes to show decreased likelihood of interest rate hike?

The US dollar rose against the pound and euro over the course of yesterday morning, taking advantage of euro weakness.

This evening will see the release of minutes from the Federal Open Market Committee, which usually gives a subtle guide as to interest rate changes.

The dovish speech from Federal Reserve chair, Jerome Powell, last week decreased the likelihood of a rate hike, as he stated the Fed was looking for further evidence of economic weakness.

Upcoming Data:

Wednesday, 9th January 2019
10:00     EUR Unemployment Rate
15:30     GBP BoE’s Governor Carney Speech
19:00     USD FOMC Minutes

Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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