The pound could take direction from the Bank of England’s latest monetary policy meeting, which is due to take place at midday today.
Although interest rates and quantitative easing measures are expected to remain the same, any comments from BoE officials about economic recovery and the UK’s recent jump inflation will be watched closely.
After strong PMI figures released for the Eurozone yesterday, the European Central Bank will hold its General Council Meeting this morning.
In the US, ‘hawkish’ comments from Federal Reserve officials have given the dollar a small boost.
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GBP: Pound could take direction from BoE meeting
The pound is steady against the euro and the dollar this morning ahead of the Bank of England’s monetary policy meeting later.
It’s likely that the Bank will keep quantitative easing and interest rate levels unchanged, but comments from policymakers about the state of the economy and inflation. So far, officials have said that the current high inflation is transitory, and they expect to see it fall to below 2%.
PMI data released yesterday for the services and manufacturing industries showed strong growth in both sectors, despite the figures being lower than record highs recorded in May.
It’s a light day for data releases in the UK today, but consumer confidence figures will be released tomorrow.
EUR: Eurozone service sector sees strong growth
The euro is mostly unchanged against the pound and the dollar this morning.
PMI data released for the Eurozone yesterday showed that the manufacturing and services industries have grown at a rapid pace in June. The latest reading for the service sector indicated the steepest rate of expansion since 2007 due to the easing of COVID-19 restrictions in many countries.
Today is light on data, but the European Central Bank will hold their General Council Meeting this morning, with speeches from officials later.
USD: Fed officials take ‘hawkish’ tone
The dollar has edged marginally higher against a basket of currencies this morning after ‘hawkish’ comments from Federal Reserve officials.
Atlanta Fed President, Raphael Bostic, and Fed Governor, Michelle Bowman, said the recent surge in consumer prices may well be temporary in nature, but they will take longer than expected to subside. Bostic also said that he expects interest rates will need to be hiked during the latter half of next year.
This differs from Fed Chair, Jerome Powell, who has downplayed the risks of rising inflation.
Several more Fed officials are expected to speak today and weekly jobless claims figures will be released later.