Sterling will probably climb to levels above $1.35 if the central bank only unveils a 25 basis point rate cut, Masafumi Yamamoto, chief currency strategist for Mizuho Securities, said in a research note.
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MSCI’s world stocks index .MIWD00000PUS , which tracks shares in 45 nations, snapped a three-day losing streak and was up 0.33 percent.
Given a positive reading could strengthen the dollar as expectations on Federal Reserve’s possible rate hike is widely anticipated, which appears to be ignored during the strong effect from June’s Brexit vote.
Britain’s FTSE 100 rose 1 percent to 6,698 after trading flat before the central bank’s announcement. “I expect a figure above 200,000”.
JAPANESE WAGES: Wage growth rebounded in June but the increase appeared to be too slow to achieve the Bank of Japan’s goal of generating 2 percent inflation.
The dollar index.DXY was steady at 95.775 after gaining 0.2 percent on Thursday. That hit for sterling came after the BoE cut interest rates to a record-low 0.25 percent, pledged 60 billion pounds ($78.71 billion) in government bond purchases and launched schemes to buy high-grade corporate bonds and ensure banks pass on the full rate cut to borrowers. The euro held steady at $1.1135, but was down 0.3 percent for the week.
Economists polled by Reuters expect USA employers to have added 180,000 jobs, compared with 287,000 in June.
The British pound crawled up 0.2% to $1.3130 after retreating 1.7% overnight.
In Tokyo, the greenback weakened to 101.22 yen from 101.25 yen Wednesday in NY. U.S. shares were essentially flat ahead of a key jobs report.
The Nikkei rose 1.1 per cent following a sea-saw session after two days of declines as bargain hunting and yen weakness lifted the market.
Oil pulled back slightly after rallying overnight following a modest stockpile drop at the United States delivery hub for crude futures.
While the rally fizzled out on Friday, prices remained well above 3-1/2-month lows hit earlier this week.
The central bank said it expected the economy to stagnate for the rest of 2016 and suffer weak growth throughout next year, and lowered its main lending rate to a record-low 0.25 percent from 0.5 percent, in line with market expectations.
“A solid July nonfarm payrolls report, with strong job gains and wage growth, will support a modest upward revision to USA interest-rate expectations in favor of the dollar”, Elias Haddad, a senior currency strategist at Commonwealth bank of Australia, told Bloomberg News. It’s on track for a 0.4% gain for the week.
Brent crude was down 0.26 percent at $42.99 a barrel, while USA crude was up 0.24 percent at $40.93.
The futures market is pricing in a 50-50 chance of another cut by year-end.
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Currencies correlated to commodities and high yielding asset classes, like the commodity-sensitive Canadian dollar and Australian currency, also performed well today, Smith said.
