 Sterling is trading slightly firmer today, though it struggles against the rebounding Dollar and Yen. BoE's rate decision leaned slightly more hawkish than expected, with only one member of the MPC, the known dove Swati Dhingra, voting for a rate cut. The rest supported keeping rates on hold. The overall tone of the statement remained unchanged, reinforcing a gradual and cautious approach to monetary easing. While BoE acknowledged downside risks to growth, it sounded alert on inflation persistence, signaling that the central bank is unlikely to rush into aggressive rate cuts. Meanwhile, Swiss Franc weakened after the SNB cut rates by 25bps to 0.25%. The message wasn’t particularly dovish. The central bank still see inflation rising back to 0.8% in 2026. Given that interest rates are already at an ultra-low level, if incoming data aligns with this forecast, further rate cuts may not be necessary anytime soon. This outlook helped cushion Franc’s downside but was not enough to prevent weakness against stronger currencies like Yen and Dollar. In the broader forex markets, Dollar and Yen are leading the charge today, though their rebounds remain relatively unconvincing. Both currencies have struggled to sustain momentum so far despite benefiting mildly from renewed risk aversion in global markets. Meanwhile, Kiwi and Aussie are under pressure, appearing to be weighed down by dampened sentiment. Loonie and European majors are stuck in the middle of the pack.... |
