All the currencies’ moves overshadowed by British pound’s sharp fall following BoE rate hike. GBP/USD plunged more than 1.4% in one day. Today all eyes will be on the U.S. job report. EUR/USD remains virtually unchanged ahead of NFP, as well as the USD/JPY.
Sterling Plunged After BoE Raised Rates
The British pound plunged severely against all the major currencies following the decision of the Bank of England to raise rates to 0.50% up from 0.25% with only two of the policymakers voting against. It was the first rate hike in a decade however, the domestic currency dropped sharply due to the dovish comments that the next rate hikes will be gradual and Brexit dependent. That rate increase erased the “emergency cut” that done last August following the Brexit vote in 2016. Meanwhile, the asset purchase program remained unchanged at £435 billion. The U.K. construction PMI for October rose to 50.8 from 48.1 before the last month, which was the lowest in fifteen months.
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