British Pound Fell Ahead of BOE Policy Meeting

On Thursday, June 24, the British pound fell in early London trading by 0.10% at $1.3962 and €85.495.

The plunge happened amidst the market attention’s focus on the upcoming meeting and policy announcement of the Bank of England.

Analysts previously said that no policy changes are expected. However, they are willing to look for hints that the BOE will follow in Fed’s decision.

In addition, England’s central bank chief Andy Haldane seems to vote again to scale back its bond-buying program.

Also, market players would be sharp in spotting any other policymakers to join him in doing so.

An expert stated that she’s hesitant about whether the BOE will be releasing the signal that Sterling bulls are hoping for. She added that it is a concern that it might be too early to send the signal since the recent rise in inflation is not yet enough.

Another analyst expects the central bank to explain its plan since consumer prices have risen over its 2% target for the first time in almost two years. Moreover, he added that the concerns about the spreading coronavirus Delta variant should halt any further hawkish repricing of the market outlook for the BOE.

In the US, Atlanta Fed President Raphael Bostic stated that he is expecting interest rates to need a hike in late 2022. Besides, he expects 7% growth, as well as inflation, which needs to be 3.4% this year.

Both Bostic and Fed governor Michelle Bowman said that they are hoping that the recent price surge will be temporary. However, it would still take a longer than expected duration to decline.

USD Up

Meanwhile, the USD climbed as investors digested the US Fed official’s mixed statement about the timeline of stimulus measures exchanges.

The US Dollar Index that trails the greenback in opposition to its six rival currencies rose 0.05% to 91.828.

It surged after two Fed officials stated that the high inflation might last longer in the US than expected.

This followed Fed Chair Jerome Powell’s reiterated statement that the recent price hike will likely disappear. 

Although, these are actually higher than expected earlier this week.

Furthermore, the USD/JPY jumped 0.08% to 111.03.

Also, the USD/CNY pair traded 0.13% higher at 6.4812.

Consequently, the NZD/USD pair also progressed 0.14% to 0.7054.

The same with AUD/USD which also hopped 0.01% to 0.7576.