The Bank of England is widely expected to hold the benchmark interest rate at 0.50% and is likely to maintain its GBP 175B asset purchase program as the board anticipates economic activity to improve throughout the second-half of the year, and the central bank may adopt a neutral policy stance going forward as the extraordinary efforts work their way through the real economy.
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The U.S. dollar rebounded slightly after being traded at the lowest level versus the European common currency yesterday this year, as a report showed that consumer prices in the bloc’s wealthiest country, Germany, declined in August in the yearly comparison, refreshing investors that the economic situation in Europe is still not as favorable as markets’ sentiment towards it. High-yielding currencies linked to commodities like the South African rand and the Australian dollar also declined after the price of metals declined worldwide. The greenback also gained versus Sweden’s krona, country which had its long term debt ratings downgraded by Moody’s Investors Service.
Two main reasons are behind the dollar’s rebound today. Firstly, a corrective movement can be perceived as traders profit from yesterday’s extensive rally in high-yielding currencies, and the current economic sentiment is not as optimist as it was some months ago, when a fast paced economic rebound was a consensus among traders for the future, proved false as still many economic regions around the world face a series of different problems.
EUR/USD traded at 1.4494 as of 9:58 GMT from a previous rate of 1.4433 yesterday. USD/CAD traded at 1.0806 after hitting 1.0690 yesterday.
If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
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