GBP falls as BoE cut interest rates
Sterling fell to multi-month lows this morning following the surprise announcement of an emergency interest rate cut by the Bank of England.
The Monetary Policy Committee unanimously agreed to reduce the UK’s interest rate by 50 basis points to 0.25%. The move by the bank follows a host of central banks who have cut their rates to minimise the economic shock caused by the coronavirus. In a statement that followed the announcement, the bank stated that the interest rate cut “will help support business and consumer confidence at a difficult time, to bolster the cash flows of business and households, and to reduce the cost, and to improve the availability of finance.”
In addition to this, British investors will also learn the extent of their own government’s fiscal response to the virus outbreak today, when new Finance Minister, Rishi Sunak, is expected to raise spending in his first budget.
The greenback clawed back ground against a basket of currencies, including the pound, after a recent slump fuelled by coronavirus fears and a collapse in US government bond yields amid a flight to safety by investors.
President Donald Trump planned a news conference later on Tuesday after saying on Monday that he was prepared to take ‘major’ steps to bolster the US economy, boosting the dollar.
Analysts said though it was too early to predict a floor for the dollar, which plunged on Monday after an energy price war between Saudi Arabia and Russia triggered the biggest daily rout in oil prices since the 1991 Gulf War and Treasury yields dropped further.
11.30: Annual Budget Release.
12.30: CPI MoM; Forecast at 0.0% against previous of 0.1%.
12.30: Core CPI; Forecast same as previous at 0.2%.
Why choose RationalFX?
Based in the heart of London’s financial district Canary Wharf, RationalFX has traded over $10billion in currencies across the globe. Take advantage of our competitive exchange rates, market expertise, suite of FX products and online payment platform when you make bank to bank transfers in over 50 currencies worldwide.
Whatever your reason for making overseas payments, we’re confident our currency specialists can save you time and money while providing peace of mind. Call our team now on: +44 20 7220 8181