BoE Comments Cause Pound to Dip While US Dollar Weakens

On Thursday, the Pound experienced a slight dip as the Bank of England continued to maintain its relaxed approach to its interest rate decisions.

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While this decision was to keep interest rates unchanged, the dovish statement didn’t fill investors with hope. The current high rate of inflation is considered transitory by the Bank of England while it didn’t address the potential tapering dates. At the end of the day, the Pound finished at 1.1668 against the Euro and 1.3922 against the US Dollar according to the Foreign Exchange Market.

The Euro made gains against many of its peers yesterday after the German business climate figures were better than expected. Business optimism improved in Germany, reaching the highest levels seen since November 2018, giving the single currency a boost. Furthermore, the Euro also benefited from a negative correlation with the US Dollar.

It was a defensive day for the US Dollar on Thursday as the market mood improved and data releases from the US failed to impress. The durable goods orders and initial jobless claims didn’t meet expectations, leading to concerns around the recovery of the US economy.

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