London (awp/afp) – The pound fell on Thursday after statements to the press by the governor of the Bank of England (BoE) Andrew Bailey, raising the prospect of a “slightly more aggressive” cut in interest rates.
Around 12 p.m., the British currency fell by 1.14% against the greenback, to 1.3116 dollars, after falling to 1.3106 dollars, its lowest since mid-September.
The pound also fell by 1.09% against the European currency, to 84.16 pence per euro.
If the fall in inflation is confirmed in the United Kingdom, the Bank of England could become “a little more active” in its approach to reducing rates, said its governor Andrew Bailey, in an interview with the Guardian on Thursday, saying consider a “slightly more aggressive” rate cut.
After a cycle of monetary easing that began in August, the BoE paused in September by leaving its key rate unchanged at 5%.
British inflation stabilized at 2.2% year-on-year in August, just above the BoE’s 2% target, but far from its peak at around 11% at the end of 2022.
Already falling at the opening of the session, the pound collapsed after these comments, interpreted by the market “as a green light towards further monetary easing”, notes Kathleen Brooks, analyst at XTB.
Investors reinforced their bets on a rate cut of at least a quarter point at the monetary institution’s next meeting in November and put the possibility of another cut in December on the table.
For its part, the dollar gained 0.05% against the euro, to 1.1039 dollars, maintaining its gains from the day before after better than expected figures on American employment in the private sector in September.
These data “suggest that the Federal Reserve (Fed) could lower its rates by +only+ 0.25 percentage points, and not 0.50 points, at its next meeting in November,” explains John Plassard, analyst at Mirabaud.
Investors are waiting for more data, with the publication of the activity index in services (ISM) in the United States in September later in the session, but especially the report on American employment scheduled for Friday.
As a safe haven, the greenback is also supported by geopolitical risk since the Iranian attack on Israel on Tuesday.
Cours de jeudi Cours de mercredi ---------------------------------------------- 10H00 GMT 21H00 GMT EUR/USD 1,1039 1,1045 EUR/JPY 162,12 162,28 EUR/CHF 0,9399 0,9384 EUR/GBP 0,8416 0,8324 USD/JPY 146,87 146,92 USD/CHF 0,8514 0,8497 GBP/USD 1,3116 1,3268
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