Will comments from the Bank of England this week help support the Pound?

Another week without many economic updates out of the UK is on the cards this week, with the main focus being the Bank of England’s interest rate decision on Thursday.

The Pound suffered last week, losing value against both the Euro and the US Dollar as the lack of data released from the UK left the Pound vulnerable. Aside from the USD and Euro strengthening against the Pound, the Pound is also vulnerable at the moment due to global risk sentiment declining due to the issues in the Middle East.

With stock markets also dropping as a ‘risk off’ attitude is adopted by financial markets, the Pound is likely to see added downward pressure as its one of the most vulnerable major currencies when it comes to market sentiment.

With little data due for release this week, Thursday afternoons Bank of England (BoE) meeting will be in the spotlight.

No interest rate increases are expected this week so rates should remain at 5.25%. There are no other hikes expected from the markets during this cycle either so the focus will be on the voting pattern of the 9-voting members, and also the comments from the BoE Governor Andrew Baily shortly after the vote is made public.

The Pound is close to the YTD (Year to Date) low against the US Dollar currently, trading around the 1.2100 level.

GBP to EUR has also come under pressure recently, and it’s dropped roughly 3-cents from the YTD high in July so the Pound id clearly in a downward trend against the major currency pairs at the moment.

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