28th June - Weekly FX Update

GBP/EUR

Monday 9:00 UTC 28th June: 1.16613

The Euro rallied against the Pound last week as the Bank of England voted to keep interest rates at 0.1% and continue its levels of quantitative easing. After inflation rose above the BoE's 2% target, it was expected interest rates may have increased from the historically low levels set by the Bank. Instead, the BoE stated inflation figures are only transitory, and despite the expectation for it to move higher, it should drop back to the 2% mark towards the end of the year. This didn't stop the announcement causing the Pound to slip against all major currencies, falling 0.74% against the Euro from Thursday to Friday. The Pound is attempting to recover this morning, trading back above 1.165.

GBP/USD

Monday 9:00 UTC 28th June: 1.39255

The GBPUSD hovered above 1.39 when closing last week, after the Pound slipped against major currencies following on from the Bank of England unanimously voting to keep interest rates at 0.1% and voting 8-1 to continue its current levels of quantitative easing. Andy Haldane was the only vote for reducing the figure of £895 billion. 1.40 continues to offer resistance to GBPUSD, despite the Federal Reserve giving mixed signals on monetary policy, which is confusing investors and increasing tension. If the Fed did however decide to tighten its spending, the market will likely shift in the Dollar's favour.