LONDON, U.K. – From its declines in the previous trading session, the British pound continued its downside trend on Friday.
Despite some hawkish hints surrounding the interest rate decision of the Bank of England, the British pound continues to slide against the US dollar. The BoE previously published its decision regarding interest rates, which was mostly neutral, as the central bank decided to keep the rates unchanged. Despite two members in favor of a rate cut, the interest rates will stay at its current 0.75% as what the market has widely expected.
Based on its published statement, the bank said that it isn’t obvious that there has been a decline in the market’s uncertainty over the rate policy after the UK election. The bank also stated that is continues to see signs that the labor market in the UK is loosening, despite remaining tight.
Further, the BoE also stated that the monetary policy could change in either direction depending on the economic outlook of the UK. Whenever the global growth will fail or there is an increasing uncertainty on Brexit, the Bank said that it may need to strengthen the inflation and GDP of the UK.
However, the British pound found a bit of support following the hint from the bank towards a moderate tightening in response to some circumstances.
On Thursday, the retail sales growth rate of the UK was published, which showed a widened decline. That, in addition to the recent BoE rate cut decision, hasn’t done any good for the pound today.
Further, according to analysts, the pound is looking towards trading under pressure going forward, especially if there are any further negative headlines regarding the Brexit.
The GBP/USD pair dropped during the previous session despite the modest support it gained following the interest rate decision from the BoE. Later on, the pair continued its declining motion and was last seen breaking the 1.3015 support line. Should the sentiment continues, the pair is looking towards the 1.2820 support level. Otherwise, it might aim towards the 1.3170 resistance line.
On the other hand, the Canadian dollar was slightly down the previous session but continued to remain within its 7-week high range from the previous trading days. The Looney is largely taking support from the recent advance in oil prices and is expected to remain range-bound.
Further, analysts noted that the commodity currency CAD will be attractive to market players with an increasingly optimistic view of global growth.
On the flip side, the wholesale trade numbers of Canada published yesterday showed a 1.1% decline during October.
Further, the market awaits on more economic highlight due later today and early tomorrow.