The pound under pressure while waiting for the BoE

Around 11:15 a.m., the British currency dropped 0.10% against the greenback, at 1,3008 dollars, and 0.08% against the euro, at 84.63 pence for one euro.

The pound lost some ground Thursday against the major currencies before a meeting of the Bank of England (BoE) which could lower rates to support the British economy on the eve of Brexit.

Around 10:15 GMT (11:15 CET), the British currency gave up 0.10% against the greenback, at 1,3008 dollars, and 0.08% against the euro, at 84.63 pence for one euro.

“The pound is under pressure before the BoE decision” scheduled at 12:00 GMT, said Samuel Siew, analyst at PFPL.

In the meantime, investors are in the dark because the arguments in favor of maintaining or lowering the rate have an equivalent weight in the eyes of economists, who are divided as rarely in their predictions.

On the one hand, a healthy job market and rebounding corporate morale lean towards the status quo. On the other, a collapse in investment and weak growth due to uncertainties around Brexit militate for a rate cut from 0.75% currently to 0.5%.

The situation makes the market “anxious,” says Connor Campbell of Spreadex.

It will also be the latest rate decision from Governor Mark Carney, who will hand over to Andrew Bailey in mid-March before becoming a UN climate change ambassador.

The European currency, for its part, was gaining ground against the greenback at 1.1017 dollars, in the wake of a low since the end of November, at 1.0992 dollars for one euro.

The unsurprising decision on Wednesday by the US Federal Reserve (Fed) to keep rates unchanged after its first monetary meeting of the year had slightly supported the dollar.

A drop in key rates makes the currency concerned less profitable and therefore less attractive to forex traders.

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