The Bank of England’s unpredictable – yet necessary – approach to bonds purchases is making for choppy Sterling waters on Wednesday morning.
After falling to two-week lows yesterday evening, the GBP/USD pair recovered half a percent this morning, though at a few pips under US$1.10, the pound is hardly in a strong position whichever way you slice it.
GBP/USD’s choppy price action on the one-hour candlestick chart – Source: capital.com
August GDP data released this morning showed a 0.3% month-on-month contraction, which could place added pressure on the pound in today’s session.
The Euro is buying 88p on the pound; the EUR/USD pair is 0.25% up against the day; and a struggling Japanese yen encouraged a 0.5% rise on the EUR/JPY pair.
The US dollar is at a 24-year high against the yen.
When the USD/JPY pair broke the 146 yen threshold three weeks ago, the Bank of Japan was forced to intervene.
There’s no guarantee of a second intervention though, given comments from prime minister Fumio Kishida yesterday urging the BoJ to “maintain its policy until wages rose”.
US Federal Open Markets Committee minutes for September are due this afternoon, though they are not expected to yield many surprises as the Fed continues to eye up further rates rises.
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