Currency news / February 6, 2025

Bank of England key for GBP today

3 min read Thanim Islam

Thanim IslamFebruary 6, 2025

Market snapshot:

BoE is widely expected to cut rates by 0.25%
Guidance will be key today

Yesterday's currency recap

We saw more USD weakness yesterday as markets continued to price out the risk of any imminent full blown trade war, as a result the USD index hit its weakest level in a week.

As the afternoon unfolded, the ADP payrolls exceeded expectations, yet this positive momentum was tempered by a softer ISM services figure.

The EUR drew some marginal support following European Central Bank (ECB) Lane’s comments who stated he sees inflation risks in the economy.

JPY extended its gains from the morning following the strong wage numbers which supported the notion of interest rates continuing to rise.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	-0.29%	1.9896
GBPCAD	0.04%	1.7883
GBPCHF	-0.20%	1.1274
GBPDKK	-0.10%	8.9613
GBPEUR	-0.10%	1.2013
GBPJPY	-1.00%	190.5100
GBPNOK	0.03%	14.0331
GBPNZD	-0.47%	2.1976
GBPSEK	-0.47%	13.6240
GBPUSD	0.27%	1.2513

*Daily move - against G10rates at 7:30am, 06.02.25
** Indicative rates - interbank rates at 7:30am, 06.02.25

Key data points

Currency	Event	Period	Consensus	Previous
EUR	Retail Sales MoM	Dec	-0.10%	-0.10%
EUR	Retail Sales YoY	Dec	1.90%	1.20%
GBP	Bank of England Rate Decision	Feb	4.50%	4.75%
USD	Initial Jobless Claims	Feb 1st	213,000.0	207,000.0

Speeches

EUR: ECB Vujcic, Nagel, Escriva
USD: Fed Waller and Logan

What we think

All eyes are on the Bank of England (BoE) today for the next BoE interest rate decision.

Markets are predicting a 0.25% rate cut today backed by 8 of the MPC members with 1 dissenting vote. The key point to look for will be the bank's revised projections on growth and inflation. A lowering of growth forecasts could see markets price in further rate cuts this year with interest rates dropping to 3.75% versus current projections of 4%. If this is the case then GBP will likely weaken.

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