Sterling remains pressured
Sterling fell to a one week-low versus the dollar and weakened against the euro on Tuesday. This was due to concerns about Britain’s future relationship with the European Union and a Bank of England meeting that could see an interest rate cut. Ahead of the knife-edge Bank of England rate decision on Thursday, the pound has been pushed and pulled this month by speculation over whether an imminent rate reduction is likely. Money markets currently price in a 52% chance of a 25 basis point cut to the base rate.
With Britain formally set to leave the European Union on Friday, concerns about future UK-EU relations are also coming back into focus. The EU will ‘never, never, never’ compromise on the integrity of its single market, its Chief Brexit Negotiator warned Britain on Monday, saying the UK must now face reality after underestimating the costs of leaving.
19:00 – USD: FOMC Statement.
19:00 – USD: Federal Funds Rate.
19:30 – USD: FOMC Press Conference.
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