GBP/USD pair rose after the BoE left interest rates steady
The British sterling increased against the U.S dollar Thursday. The currency gained after the Bank of England left interest rates steady. However, the BoE signalled its plan to tighten monetary policy as the central bank reined in its threshold to start the tapering of bonds purchases.
The pound surged 0.3% against the greenback to trade at $1.3927.
The BoE kept rates intact at 0.1%, and its monthly bond purchases steady at £895 billion. Remarkably, the central bank’s monetary policy committee members voted 7 to 1 voted to keep asset purchases steady until its benchmark rate reaches 0.5%. The central previously announced it wouldn’t reverse quantitative easing until the rate reached 1.5%.
Meanwhile, the American currency surged on Friday morning in Asia in the run-up to the U.S. jobs report. The data could see the U.S. tightening its monetary policy earlier than Japan and Europe.
The U.S. dollar index increased by 0.12% to settle at 92.362. The dollar against the Japanese yen boosted 0.10% to 109.84.
Risk-sensitive currency, the Australian dollar, declined by 0.24% to 0.7387. Its New Zealand counterpart fell 0.09% to 0.7046.
The dollar rose by 0.06% against the Chinese yuan to 6.4646.
Federal Reserve Vice Chair says conditions for an interest rate hike could be met in 2022
Moreover, the Reserve Bank of India also handed down its policy decision.
U.S. Federal Reserve Vice Chair Richard Clarida’s comments earlier in the week led to a sharper focus on the labour market’s rebound from coronavirus and the U.S. jobs report, due later on Friday. Richard Clarida reported that conditions for an interest rate hike could be met in 2022.
According to the data published on Wednesday, the ADP non-farm employment change was at 330,000 in July. Meanwhile, the services purchasing managers’ index (PMI) was 59.9.
Furthermore, the Institute of Supply Management (ISM) non-manufacturing employment stood at 53.8, while the ISM non-manufacturing PMI was at 64.1.
However, investors cheered a decline in U.S. initial jobless claims, with 385,000 claims during the past week.
The New Zealand dollar was poised to be the best performing G10 currency as the week ends. Moreover, the expectation is also growing that the Reserve Bank of New Zealand will hike interest rates at its next meeting on August 18.
In cryptocurrencies, at the time of writing, the largest cryptocurrency, Bitcoin, traded at $40,860.40. Meanwhile, Ethereum stood at $2,773.51.
