The British pound today fell against the US dollar after the Bank of England left its monetary policy unchanged and exhibited confidence in Britain’s economy. The GBP/USD currency pair had rallied higher earlier today amid rumors that Theresa May was willing to relax her tough stand on a customs union with the EU in order to get her Brexit deal done.
The GBP/USD currency pair today initially rallied to a session high of 1.3081 before falling to a low of 1.3016 in the American session.
The currency pair initially traded in a tight range during the Asian session before rallying higher in the early European session. However, the pair soon fell despite the release of the upbeat Markit/CIPS UK construction PMI, which came in at 50.5 beating expectations set at 50.3. The cable’s decline continued even after the BoE’s Monetary Policy Committee left the bank’s refinancing rate at 0.75% and the asset purchase facility at £435 billion as expected. Investors were disappointed that the MPC voted unanimously against a rate hike. The BoE also released its quarterly inflation report and the BoE Governor Mark Carney also gave a speech reiterating the central bank’s position.
The cable headed lower in the American session as the greenback rallied higher driving the US Dollar Index to a daily high of 97.85. The disappointing US initial jobless claims report had a muted impact on the pair.
The currency pair’s future performance is likely to be affected by tomorrow’s UK services PMI and US non-farm payrolls.
The GBP/USD currency pair was trading at 1.3023 as at 16:10 GMT having dropped from a high of 1.3081. The GBP/JPY currency pair was trading at 145.12 having declined from a high of 145.86.
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