GBP and EUR Movement Expected after Central Bank Meetings

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Pound Sterling

The Pound is little changed against its major peers as economists await the outcome of the Bank of England and European Central Bank interest rate decisions. The BoE is forecast to leave interest rates unchanged but any hints that policy makers are moving closer to voting for a rise will likely support the Pound. The currency remains under pressure due to concerns over the Scottish Independence vote, which will take place on the 18th.

US Dollar

The US Dollar was holding ground against its rivals as the markets paused before the release of domestic balance of trade, jobless claims and non-manufacturing PMI data. Strong figures for each will send the ‘Greenback’ higher as confidence that the world’s largest economy is recovering grows. Bets that the Federal Reserve could raise interest rates sooner than expected are also likely to rise. The ‘Greenback’ also found support after Ukraine’s President sent financial markets into turmoil after backtracking on claims that a ceasefire was in the offing.

Euro

The Euro softened against the Pound and other peers on Thursday after Ukrainian President Petro Poroshenko backtracked on his talk that the Ukrainian crisis could end. Yesterday he said that a deal had been reached with Russia but his phrasing was later edited and a representative of President Putin said that no deal had been reached due to Russia not being involved in the fighting. The confusion caused the Euro to give back its gains. Investor attention is now focused on the ECB policy meeting. Some economists are expecting the bank to announce new monetary easing measures in an effort to try to tackle low inflation and spur on growth.

Australian Dollar

The ‘Aussie’ eased against the Pound and other peers ahead of the major central bank news due to come out of the Eurozone and UK. Earlier in the session the currency had found support as official data showed that the country’s trade deficit narrowed to A$1.36 billion in August, which was smaller than the forecast of A$1.51 billion and down from June’s deficit of A$1.56 billion.

New Zealand Dollar

The New Zealand Dollar was hovering close to a six-month low as investors were waiting for the release of US employment data. Demand for riskier assets also softened due to the confusion over the announced ceasefire out of Ukraine.

Canadian Dollar

The ‘Loonie’ gave up gains against the Pound and US Dollar after demand for riskier assets softened and as the Bank of Canada left interest rates unchanged at 1%. Strong factory orders data also bolstered the US Dollar at the expense of its Canadian relation.

South African Rand

Like other emerging market currencies, the Rand softened as initial hopes for a ceasefire in Ukraine were dashed. Also weighing on the Rand was a report which showed that confidence in the South African finance sector tumbled by more than 17% following last month’s collapse of African Bank.

Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.

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