The dollar was unable to regain any strength following the Fed’s interest rate announcement and accompanying statement on Wednesday. The central bank’s note of caution regarding the growth prospects for the US economy over the coming year kept the dollar low and allowed the single currency to reach close to 1.15 against the greenback. GBPUSD also managed to gain 0.3% and pushed towards 1.27 before settling in the high 1.26’s where we’re trading currently.
The actions of the Bank of England’s Monetary Policy Committee hurt the pound yesterday as they held rates as expected and warned of the risks associated to a no-deal Brexit. Sterling was briefly bolstered by better than expected retail sales figures released in the morning, but these were quickly forgotten and replaced by the ever-present Brexit concerns. The BoE commented that Brexit uncertainty had ‘intensified considerably’ recently and the nine strong rate setting committee unanimously voted to hold rates at 0.75%.
Today’s key events
This morning, figures from the Office of National Statistics showed borrowing was at a 14-month low in November while the UK’s current account deficit had widened in the third quarter, beyond what analysts had forecast. Final Gross Domestic Product figures for the last quarter arrived in line with expectations and gave the pound a little boost towards 1.11 against the euro.
This afternoon, Canada and the US will steal focus as retail sales for the former, durable goods orders for the latter and GDP numbers for both will be released. Canada’s central bank will also announce its business outlook survey while the US will reveal its consumer sentiment figures.