Will a change in outlook from the Bank of England cause the Pound to fall?

Sterling exchange rates have dropped off since the Bank of England (BoE) opted to pause interest rate hikes.

The last increase was made on the 3^rd of August and the BoE kept rates at this level on the 21^st of September which came as a surprise to the currency markets, and resulted in a slight weakening of the Pound against the Euro, US Dollar and most other major currency pairs.

The next opportunity for the BoE to amend rates will come on the 2^nd of November, and according to the latest Reuters polls the expectation that rates will remain on hold. There is currently an 80% chance that rates will remain on hold according to the latest polls on Reuters.

These predictions can change in the lead up to the announcement as we witnessed in September, so it’s worth following this topic if you’re trying to second guess the Pounds next move.

Across the past year the Pounds movements are mixed when compared with the US Dollar and the Euro.

Despite softening recently, the Pound is just a couple of cents from the annual high against the Euro.

The Pound’s performance against the US Dollar is in contrast with GBP/EUR as it’s lost around 9% against the US Dollar since the height of summer.

On Wednesday, inflation data will be released which could impact the Pound’s value if the figures released deviate from expectations. UK inflation remains above 6% which is well above the BoE’s target of 2%.

Inflation data along with economic growth data is now being watched closely, to try and get an insight into the BoE’s next moves regarding monetary policy.

The post Will a change in outlook from the Bank of England cause the Pound to fall? appeared first on Pound Sterling Forecast.