By Areena Fx- The Euro drifts lower as the Pound bounces from lows heading into this week’s BoE monetary policy decision.
- The Bank of England is expected to cut interest rates by 25 basis points to 4%.
- In the Eurozone, July’s final HCOB Services PMI has been revised down to 51.0 from the previous 51.2.
The Euro trades lower for the second consecutive day on Tuesday, exploring levels sub-0.8700 as the Pound trims some losses, with investors shifting their gaze to the Bank of England’s monetary policy decision, due next Thursday.
The weak UK employment and Gross Domestic Product figures seen in July have boosted market expectations that the Bank of England will cut rates by 25 basis points, leaving its benchmark rate at 4%, after Thursday’s meeting.
The BoE is expected to ease monetary policy further
Recent monetary policy meetings, however, have revealed a split committee, with the hawkish party showing its concern about the heating inflationary trends. The possibility of leaving rates unchanged seems remote but is not completely discarded. Such an outcome would send the Sterling rallying.
The Euro, on the other hand, remains moderately weak, weighed down by a lopsided trade deal with the US and signs of deterioration in the bloc’s leading economies. The final Eurozone Services PMI has been revised lower to a 51.0 reading from the preliminary estimations of 51.2.
Later on the day, S&P Global will release the final reading of the UK Services PMI. Preliminary estimations pointed to a slowdown to 51.2 from the previous month’s 52.8 reading.