020 7898 0500Sterling had a mixed performance on Tuesday, largely as a result of the weakness of the US dollar and the strength of the euro. It weakened against the euro as ECB President Draghi gave the first signal that we might see tapering of quantitative easing later this year, and potentially a rate hike in 2018.
On the other hand, the pound’s performance against the greenback was better, as we are seeing a prolonged period of US dollar weakness after the International Monetary Fund slashed its US growth projections.
Yesterday, the BoE’s Financial Stability Report focused on the risks that have been brought about by Brexit. In addition, while the banking sector is in a better position than it was, the BoE will insist that banks find a further £11.4billion in the next 18 months. The additional capital will be in place as a safety buffer against the risk of bad loans.
Following a hectic day of news and data, there is nothing major to note today. Having said that, BoE Governor Carney is to speak once again. He’ll be participating in a panel discussion on central banking.
