Daily digest market movers: Pound Sterling wobbles against US Dollar
- The Pound Sterling ticks up against its major peers, except Asia-Pacific currencies, in Thursday’s European trading hours. The British currency rises as market participants seem confident that the Bank of England’s (BoE) policy-easing cycle will be less aggressive than that of other central banks.
- According to a Reuters poll, the BoE is expected to leave interest rates unchanged at 5% next week but is expected to reduce them again in November despite inflation remaining above the bank’s target of 2%. The comments from BoE Governor Andrew Bailey at the Jackson Hole (JH) Symposium also indicated that the central bank will cut interest rates gradually to keep a lid over inflationary pressures.
- An increase in market expectations for the BoE, keeping interest rates steady this month, appears to be the outcome of robust job growth and a decline in the Unemployment Rate. In the three months ending July, the jobless rate fell to 4.1%, while UK employers hired 265K new workers, a significantly higher number than the former release of 24K.
- Going forward, the next big triggers for the Pound Sterling will be the United Kingdom (UK) Consumer Price Index (CPI) data for August and the BoE’s interest rate decision, which are scheduled for next week.
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