Hawkish expectations of the outcome of the Bank of England (BOE) policy meeting; and Europe (ECB) today has lifted pound and euro currency trading to rise.
This was also followed by the retreat of the greenback dollar from its 18 -month high, seeing the dollar index traded hovering around 96.00 in the Asian session.
The decline was influenced by disappointing readings of ADP employment data, with a contraction of 301,000 in January. This has caused investors to worry that the NFP employment report on Friday will also show a weak reading.
The BOE is widely expected to raise its interest rates for the second time in a row to curb rising inflation which is currently at a 30-year high.
Earlier, it had started a tightening cycle in December by raising the rate from 0.1% to 0.25%. The move came as a shock to the market as the Omicron variant spreading aggressively in the UK has raised concerns over new restrictions will be implemented.
During the Asian session, the pound traded higher with the price hovering at a one -week high of 1.35600 against the US dollar.
While the euro also traded higher, easing losses recorded following the USD surge following the outcome of last week’s FOMC policy meeting.
The ECB is not expected to make any changes, but the recent rise in inflation has led investors to expect the central bank to raise rates by the end of the year.
