Pound rocked by BoE’s bleak economic forecasts

The past couple of weeks have seen some erratic movement in the currency market, amid mixed data releases and economic jitters.  

This saw GBP/EUR trade between 1.19 and 1.17, while EUR/GBP fluctuated between 0.84 and 0.83.

Meanwhile, GBP/USD slumped from 1.21 to 1.20, while EUR/USD retreated from 1.02 to 1.01.

Latest currency news

Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…

What’s been happening?

The pound was met by heavy selling pressure at the start of August following the Bank of England’s (BoE) latest interest rate decision. While the BoE raised rates by 0.5%, its bleak forecasts and warning that the UK will slip into a recession later this year, weighed heavily on Sterling sentiment.

Meanwhile the US dollar saw some notable volatility as a cooler-than-expected US inflation print prompted USD investors to reprice their Federal Reserve rate hike bets. 

The euro also traded in a wide range over the past couple of weeks, fluctuating in response to European energy concerns and USD price dynamics.

What do you need to look out for?

Looking ahead, the second half of August may see the pound remain on the back foot amid heightened concerns over the UK’s cost of living crisis and the current political vacuum. 

For USD investors the focus will likely be on the Fed’s Jackson Hole Symposium. Any stronger hints regarding the bank’s policy outlook could inspire movement in the US dollar.

Meanwhile, the movement in the euro is likely to remain tied to concerns over European energy security. While the single currency also likely to be pressured if the Eurozone’s latest PMI figures point to another contraction in the bloc’s private sector.

At Currencies Direct we’re here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers. Since 1996 we’ve helped more than 325,000 customers with their currency transfers, just pop into your local Currencies Direct branch or give us a call to find out more.