The pound sterling fell to 27-month lows against the greenback on July 16, after Boris Johnson and Jeremy Hunt, frontrunners to succeed outgoing UK Prime Minister Theresa May, hardened their Brexit pitches over the Irish backstop.
The United Kingdom will formally exit the European Union in March 2019. Both the UK and the countries representing the euro area are expectantly readying for the massive changes that are likely to follow once Britain exits.
On March 21, the Federal Open Market Committee (FOMC) of the US Federal Reserve Board under its new chairman, Jerome Powell, raised benchmark interest rates, or the target for the federal funds rate, by 25 basis points to 1.5-1.75 percent
The Monetary Policy Committee (MPC) of the Bank of England voted by a 7-2 majority to raise key interest rates from 0.25 to 0.50 percent, following the penultimate MPC meeting of the year.
The pound sterling came under selling pressure versus the greenback and the euro this month, as mixed economic data from the United Kingdom and the ongoing departure negotiations with the 27 countries representing the European Union (EU) have remained grim. The UK is due to exit the European Union at the end of March 2019.
The ECB’s monetary policy in September was a non-event, with the governing council neither making any changes to the existing policy nor adding new ones as they voted to leave interest rates and non-monetary policies on hold.
The seasonally adjusted second-quarter 2017 gross domestic product (GDP) growth in the eurozone, or the 19-member euro area, rose at a related pace of 0.6 percent. Compared to the same period a year earlier, the seasonally adjusted growth numbers in the euro area expanded at 2.1 percent, and 2.2 percent in EU28.
Members of the monetary committee of the Bank of Japan (BOJ) have excluded for the moment the possibility of decreasing their monetary-easing policy. The issue is that their 2 percent target for inflation is far from being achieved in Japan and is not forecast to be in the short-term.
Since the beginning of 2017, the euro keeps strengthening against the US dollar, with around a 10-percent increase between January 2 and June 29, from $1.04 per euro to more than $1.144 per euro.