11th May 2018 Market Update
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🇬🇧 GBP – Mark Carney lived up to his billing as the ‘unreliable boyfriend’ by deciding to leave interest rates on hold blaming the bad weather for the softer growth in the first quarter. In what was a dovish accompanying statement, the BoE also cut growth forecasts for this year to 1.4% from 1.8% and for 2019 and 2020 cut growth from 1.8% to 1.7%. Sterling unsurprisingly dropped across the board with the notable drop against the greenback, where at its lowest created a new four month low.
Carney’s comment later on in the afternoon appeared to show some confidence of a rebound in the economy over the next three months, suggesting that we could well see a rate rise by the Bank later this year.
No data out today as the market will continue to digest the rate decision but it would appear that we could well see the pound languish near present levels going into the weekend.
🇪🇺 EUR – No data yesterday with Germany and France closed for Ascension Day but we did see the euro rebound off a five-month low against the US dollar following the weaker than expected inflation data from the US.
ECB President Mario Draghi will be doing a speech at 2.15pm today.
🇺🇸 USD – Weaker than expected inflation figures caused the US dollar to weaken across the board yesterday, barring the pound – this probably helped the pound to stop weakening further against the Greenback.
No major news today but yesterday’s weakening of the dollar may well continue.
14:15pm – ECB President Mario Draghi Speech
Summary: Sterling falls to a four-month low after the Bank of England decided to leave interest rates at 0.5% and slashed growth forecasts.
US inflation fell short of expectations as well causing the US dollar index to fall over the course of the afternoon.
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