Pound May Correct Lower After BOE, Aussie Higher on Jobs Data

The British Pound may correct lower after another status-quo rate decision from the Bank of England. The Aussie Dollar rose on upbeat jobs data overnight.

Talking Points:

• British Pound May Correct Lower After a Status-Quo BOE Rate Decision    

• Aussie Dollar Jumps on Jobs But Chinese Export Slump Tempers Advance    

• Japanese Yen Outperforms on Haven Demand as Nikkei 225 Trades Lower

A monetary policy announcement from the Bank of England headlines the economic calendar in European hours. On the whole, UK data outcomes have been broadly stable relative to consensus forecasts since the March sit-down. Meanwhile, leading PMI data suggests manufacturing- and service-sector growth accelerated at the slowest pace since June 2013. Furthermore, the latest set of CPI figures put the headline year-on-year inflation rate at just 1.7 percent, the lowest since October 2009.

Taken together, this suggests Governor Mark Carney and company are unlikely to back away from the central bank’s accommodative policy setting, leaving things unchanged for the time being. While a status quo outcome is generally expected, the absence of hawkish cues in the context of three consecutive days of British Pound gains may prompt a degree of profit-taking, sending the UK unit lower in the near term.

The Japanese Yen outperformed in overnight trade as the Nikkei 225 stock index traded lower, boosting demand for the regional safe-haven currency. The Australian Dollar likewise advanced after the March Employment data showed the economy added 18.1k jobs, topping forecasts calling for a meager 2.5k increase. The Aussie’s gains were tempered by a disappointing set of Chinese Trade Balance figures however. The report revealed an unexpected 6.6 percent year-on-year drop in exports, an outcome that fell far short of the 4.8 percent increase penciled in by economists ahead of the release.

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