Sterling Retreats From Post-BoE Lows
British pound shows slight growth today. The GBP/USD pair is trading at 1.3564 level, having gained 0.34% today. The pound is currently making the largest gains versus the US dollar and the euro. Yesterday, the pound fell sharply thanks to both poor economic data and weak guidance from the Bank of England. Following yesterday's statement and comments from Governor Mark Carney, traders don't expect any rate hikes this year. The Bank of England maintained interest rates as expected (0.5%), but lowered its guidance for inflation and growth this year.
The BoE said it expected British economy would grow by 1.4% this year, down from the 1.8% rate it predicted in February. For 2019 and 2020, it predicted GDP growth would pick up to 1.7%, down from 1.8% in its February forecasts. Inflation is forecast to be 2.4% this year. For Q2 2019, inflation forecast was revised down from to 2.1%, from 2.2%. Q2 2020 inflation forecast was revised down to 2.0%, from 2.1%.
This is an important week for the British pound, in relation of economic calendar and Bank of England meeting. YoY Halifax house prices for April (2.2% vs. 3.3% expected) were lower than expectations. BRC retail sales for April (-4.2% vs. -0.8% expected) were significantly below expectations. The RICS housing price balance for April (-8% vs. -1% expected) was significantly below expectations. Industrial production (2.9% vs. 3.1% expected) and the total trade balance for March (-£12.3b vs. -£11.3b expected) were below expectations. Manufacturing production for March (2.9%) met expectations.