The pound made further gains on Thursday, going beyond the one-month high it reached against the euro on Wednesday. Investors reduced bets on an interest rate cut as data this week has been more positive. The probability now lies around 50%, down from 70% on Monday. The pound gained 0.2% against the euro however was slightly lower against the dollar.
This week has seen an improvement in manufacturers’ sentiment from the Confederation of British Industry and the strongest job creation rate in a year. Today’s PMI index data could swing the interest rate cut debate either way.
GBPUSD opened at 1.3146 and dropped steadily across the day to close at a low of 1.3099
GBPEUR opened at 1.1849 and rose steadily across the day, reaching a high of 1.1880 and closed at 1.1870
The dollar made gains against the euro on Thursday after the European Central Bank left rates unchanged. New President Christine Lagarde is hoping to redefine the Bank’s policy in achieving its aims. Inflation in the eurozone has fallen just under the 2% target for years even after aggressive stimulus measures so analysts believe the Bank will seek out a new approach. The euro was 0.32% lower against the dollar.
The safe haven currencies made modest gains as investors were not yet panicking about the spread of the new coronavirus. The World Health Organisation has said it is too early to declare a global health emergency. The dollar gained 0.28% against the Chinese yuan.
EURUSD opened at 1.1091 and made modest gains in the morning and early afternoon before dropping sharply to a low of 1.1038 shortly before closing