RationalFX : Sterling fell to two week lows against both the EUR and USD on Thursday as the Bank of England kept interest rates on hold and the Conservative Party announced its legislative agenda for next year…
The pound fell following the Queen’s Speech as Johnson confirmed his number one priority was to ‘get Brexit done’ and that he would lead Britain out of the European Union on 31st January 2020. Johnson added that he wouldn’t tolerate any further delays to the Brexit process by ruling out an extension to the transition period.
Elsewhere, the Bank of England kept the pressure on GBP as they announced that they would remain in ‘wait and see’ mode before adjusting monetary policy.
Despite a downgrade to its forecast for growth in the UK, the BoE announced that they would keep rates on hold at 0.75%, stating that it was too soon to gauge the impact a Boris Johnson government would have in lifting the uncertainty around Brexit.
The Bank’s Monetary Policy Committee voted 7-2 in favour of keeping the official rate on hold with both Michael Saunders and Jonathan Haskel arguing for a rate cut.
The US dollar rose on Thursday despite a weaker than expected release of the Philadelphia Fed’s Business Conditions Index which fell to 0.3 in December from 10.4 in November. The USD was buoyed by strong economic data released on Wednesday which eased fears the Federal Reserve will continue its cutting cycle in 2020.
The USD also avoided any negative implications from the news of US President Donald Trump’s impeachment. Investors held off selling the USD as expectations of Trump being removed from office are extremely low due to the overwhelming Republican majority in the senate.
09.30 – GBP – Gross Domestic Product (QoQ) (Q3) Forecast to stay the same as previous at 0.3%.
13.30 – USD – Gross Domestic Product Annualized (Q3) Forecast to stay the same as previous at 2.1%.
Source : ETFWorld.co.uk