British Pound steadies against Euro as BoE leaves interest rate unchanged
- EUR/GBP trades flat on Thursday as traders show a limited reaction to the BoE interest rate decision.
- Governor Andrew Bailey says the BoE stands ready to adjust policy as the economic outlook evolves.
- The Euro struggles to benefit from stronger Eurozone growth and hotter German inflation data.
EUR/GBP trades almost flat on Thursday, hovering close to its highest level in nearly a month as the British Pound (GBP) modestly outperforms the Euro (EUR) following the Bank of England’s (BoE) monetary policy decision. At the time of writing, the pair trades around 0.8570, pausing a three-day winning streak.
In its monetary policy statement, the central bank noted, "The impact of the energy shock on the UK economy remains uncertain. Monetary policy cannot influence energy prices but is being set to ensure that the economic adjustment to them occurs in a way that achieves the 2% inflation target sustainably."
The BoE left the Bank Rate unchanged at 3.75% in a 6-3 vote, with all members agreeing that energy-price risks were tilted to the upside. The majority said the tightening in financial conditions since the Middle East war began was providing "sufficient insurance" against inflation risks from higher energy prices.
The three members who backed a 25-basis-point hike argued that uncertainty over the conflict remained high and believed a proactive rate increase would reduce the risk of second-round effects setting in.
BoE Governor Andrew Bailey said UK economic activity is subdued and the labour market is soft. He added that there is no evidence of second-round effects from higher energy prices so far, although it is too early to take much comfort from this. Bailey also said the central bank stands ready to adjust its policy stance as the outlook evolves.
On the Euro side, the currency fails to draw support from stronger-than-expected Eurozone data. Preliminary Gross Domestic Product (GDP) expanded 0.4% QoQ in the second quarter, beating expectations of 0.2% and rebounding from a 0.2% contraction, while German inflation also came in hotter than expected.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.08% | -0.15% | -0.33% | -0.06% | -0.37% | -0.77% | -0.22% | |
| EUR | 0.08% | -0.08% | -0.22% | 0.02% | -0.31% | -0.71% | -0.14% | |
| GBP | 0.15% | 0.08% | -0.13% | 0.09% | -0.22% | -0.62% | -0.04% | |
| JPY | 0.33% | 0.22% | 0.13% | 0.27% | -0.05% | -0.46% | 0.14% | |
| CAD | 0.06% | -0.02% | -0.09% | -0.27% | -0.31% | -0.72% | -0.13% | |
| AUD | 0.37% | 0.31% | 0.22% | 0.05% | 0.31% | -0.39% | 0.16% | |
| NZD | 0.77% | 0.71% | 0.62% | 0.46% | 0.72% | 0.39% | 0.62% | |
| CHF | 0.22% | 0.14% | 0.04% | -0.14% | 0.13% | -0.16% | -0.62% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
Nothing in this material constitutes investment advice, personal recommendation, investment research, an offer, or a solicitation to buy or sell any financial instrument. The content has been prepared without consideration of your individual investment objectives, financial situation, or needs, and should not be treated as such.
Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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