There were no major surprises from the Bank of England yesterday - the interest rate is to remain at 5% for now and future reductions will take place gradually over time, the bank announced.
Eight of the nine members of the Monetary Policy Committee (MPC) voted to hold the rate at 5%, with only one dissent from Dr Swati Dhingra, who voted for a 0.25% rate cut.
GBP continued to benefit from diverging rate policies with GBPUSD hitting its highest levels since March 2022. GBPEUR climbed close to 2024 highs. USD attempted to gain in the afternoon after jobless claims numbers came in lower than expected, but those gains were limited.
*Daily move - against G10 rates at 7:30am, 20.09.24
** Indicative rates - interbank rates at 7:30am, 20.09.24
GBP is soaring higher this morning after UK retail sales surpassed expectations yesterday. Markets were expecting a monthly increase of just 0.4% in August and the number came in at 1%.
GBPUSD continues to trade at its highest levels since March 2022 and GBPEUR now trades at its highest since August 2022. Diverging rate polices and this higher sales number should continue to support GBP in the short term.
JPY is weaker this morning following comments by Governor Ueda suggesting that inflationary pressures in Japan look to be easing.
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