The pound is trading at strong levels against both the euro and the dollar following yesterday’s Bank of England monetary policy meeting, which markets have dubbed ‘Super Thursday’.
The BoE gave off a more ‘hawkish tone’, suggesting that ‘modest tightening’ of policy might be needed if the UK economy continues to improve in the way it is.
The euro, on the other hand, is struggling against the pound and the dollar as the European Central Bank sticks to its guns on maintaining interest rates until inflation reaches 2%. Dollar strength is also weighing on the euro.
The greenback is benefitting from a cautious market mood and ‘hawkish’ comments around tapering. Markets are now looking to Non-farm Payrolls for July which are due around lunchtime and could give the dollar new direction.
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