UK rate cut expectations rise, GBP under pressure…
The pound found itself tumbling below the key psychological support level of $1.30 against the US dollar yesterday. Market chatter is increasing over the prospect of a fresh interest rate cut from the Bank of England. Even though political certainty may be enhanced via last month’s general election, the UK economy appears to be slipping into further trouble. Yesterday’s set of manufacturing and industrial production numbers exemplify this point.
The Bank of England will be keen to ensure confidence throughout the business community as well as provide reassurance to the general public that they are paying attention to recent economic developments. Mark Carney’s final press conference arrives at the end of this month, he may well find himself justifying a potential rate cut.
Today’s main data highlight comes from the US. At 1330, inflation numbers will be released. This data-point is watched by the Federal Reserve and, as a result, could have an impact on the greenback. Additionally, many will be paying attention to developments regarding the official signing of the US/China Phase I trade deal which is set to take place at the White House tomorrow.
Written by Viv Savani. 8:28am, January 14th 2020
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