Spotlight on the Bank of England

Key Headline:

·       BoE Rate Decision: A 0.25% rate cut is widely expected.

·       Market Focus: Forward guidance will be key in shaping GBP movement.

·       Economic Outlook: Investors will watch for signals on future rate cuts and growth projections.

·       GBP Impact: Any deviation from expectations could trigger volatility.

Recap

·      USD Weakness: The USD index hit a one-week low as markets priced out the risk of an imminent trade war.

·      Mixed US Data: ADP payrolls exceeded expectations, but softer ISM services tempered momentum.

·      EUR Support: ECB’s Lane highlighted inflation risks, offering marginal support to the euro.

·      JPY Gains: Strong wage data reinforced expectations of continued rate hikes, extending JPY strength.

Today’s Rates

Today's Interbank Rates at 10:25 am against GBP movement.

GBP>EUR – 1.1988

GBP>USD – 1.2420

EUR>GBP – 0.8340

EUR>USD – 1.0363

GBP>CAD – 1.7823

GBP>AUD – 1.9821

GBP>SEK – 13.581

GBP>CHF – 1.1241

GBP>PLN – 5.0400

GBP>AED – 4.5618

GBP>HKD – 9.6740

GBP>ZAR – 23.090

Today’s Key Takeaways

·       BoE Decision: Markets anticipate a 0.25% rate cut, with an 8-1 MPC vote.

·       Key Focus: Revised projections on growth and inflation.

·       Growth Forecasts: A downgrade could lead to expectations of further cuts to 3.75% (vs. 4% currently).

·       GBP Impact: Lower growth forecasts may weaken the pound

6th February 2025

This document has been prepared solely for information and is not intended as an Inducement concerning the purchase or sale of any financial instrument. By its nature market analysis represents the personal view of the author and no warranty can be, or is, offered as to the accuracy of any such analysis, or that predictions provided in any such analysis will prove to be correct. Should you rely on any analysis, information, or report provided as part of the Service it does so entirely at its own risk, and Frank eXchange Limited accepts no responsibility or liability for any loss or damage you may suffer as a result. Information and opinions have been obtained from sources believed to be reliable, but no representation is made as to their accuracy. No copy of this document can be taken without prior written permission.