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GOOD MORNING FROM EURO FX Pound rallies as analysts refuse to rule out possibility of BoE rate hike


The pound showed signs of life again on Monday, with the currency beginning to recoup some of its recent losses amid some cautious optimism that the Bank of England (BoE) could still target a rate hike in May.

What’s been happening? The pound appeared to find its feet again at the start of this week’s session as a number of analysts suggested that markets may have been a little too hasty in dismissing a rate hike from the BoE next month. Some analysts went on record to state that they still expected a rate hike next month and suggested that markets shouldn’t read too much into last week’s remarks by Governor Mark Carney given the Monetary Policy Committee’ (MPC) ‘known reluctance to pre-commit’. The uptick in the GBP/EUR exchange rate was also aided by the release of the latest Eurozone PMI figures yesterday. While the PMI printed higher than expected, holding steady at 55.2, analysts suggested that this was indicative of the Eurozone shifting into ‘lower gear’ after growth raced higher in 2017. Meanwhile the GBP/USD exchange rate faced considerable headwinds on Monday, with the pairing falling around half a cent to a new one-month low as the US dollar was buoyed by an almost 3% rise in US treasury yields. While rising bond yields have not always lent strength to USD, when combined with waning geopolitical tensions and stronger-than-expected housing figures it prompted investors to flock to the US currency.


EURO FX RATES TODAY ARE

STG =1.1200

EUR =0.8550

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