The pound is still weaker against the euro and the dollar this morning after the Bank of England’s interest rate decision last week. Just two BoE policymakers voted in favour of raising interest rates, whilst seven voted to keep the rate the same.
This week, all eyes will be on UK GDP figures, which are due to be released on Thursday. The economy is predicted to have expanded by 1.5% in the third quarter of this year.
Flights from the UK to the US are resuming today after the White House opened US borders to fully vaccinated travellers after more than 600 days. Visitors must be fully vaccinated and have a negative test to enter.
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GBP: GDP figures due on Thursday
Sterling is still weaker against the euro and the dollar this morning following the Bank of England’s monetary policy meeting last week.
Only two members of the Monetary Policy Committee voted to hike interest rates, whilst seven voted to keep the rate the same. This caused the pound to fall as many investors expected or hoped for an interest rate rise after recent ‘hawkish’ comments from BoE officials.
It’s a quiet week for data, however, GDP figures will be released for the UK on Thursday. It’s estimated that the economy would have expanded by 1.5% quarter-on-quarter in the third quarter of this year. In quarter two, the economy expanded by 5.5% due to the easing of Covid restrictions.
GBP/USD chart over past year
EUR: ECB’s Chief Economist to give a series of speeches this week
The euro is stronger against the pound and slightly weaker against the dollar this morning.
There will be a series of data releases for Europe this week, including economic sentiment figures for Germany and the Eurozone tomorrow, as well as inflation rate data for Germany on Wednesday.
The ECB’s Chief Economist, Philip Lane, will give a series of speeches this week. Over the weekend, he said that the high inflation Europe is seeing at the moment is “very unusual and temporary”. He also said that officials believe there are strong reasons for inflation to fall next year.
USD: Federal Reserve officials to speak today
The dollar is strong against the pound and euro this morning, but slightly weaker against other currencies following the Federal Reserve’s statement that it will be ‘patient’ when deciding to raise interest rates.
Six Federal Reserve officials will speak today, including Chairman Jerome Powell. The markets will be listening out for any comments surrounding interest rates, monetary policy and inflation.
This comes ahead of the release if inflation data on Wednesday. Inflation and core inflation, which excludes volatile food and fuel costs, is expected to have edged higher in October.
Non-farm payrolls released at the end of last week revealed that the US economy added 531,000 jobs in October, the most in 3 months and above market forecasts of 450,000 as Covid-19 cases dropped and employers offered higher wages and more flexible hours.