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ForexLive European FX news wrap: BOE delivers rate cut in narrow vote

Headlines:

Markets:

  • CHF leads, GBP lags on the day
  • European equities lower; S&P 500 futures up 0.4%
  • US 10-year yields up 2.3 bps to 4.056%
  • Gold down 0.3% to $2,441.63
  • WTI crude up 0.6% to $78.37
  • Bitcoin up 0.1% to $64,645

The highlight of the session was the BOE decision. And in a knife’s edge call, the central bank voted to cut the bank rate by 25 bps to 5.00%. The vote was as close as it gets with five members voting for a cut while four members wanted to keep rates unchanged.

The pound weakened into the decision with cable already slipping from 1.2850 to 1.2760 before the announcement. Bailey & co. offered no confirmation of a follow-up move in September though and that is keeping markets more tentative. GBP/USD bounced back a little to 1.2790 levels now, still down 0.5% on the day though.

Besides that, the dollar is proving its resilience once again as it pushes back against the post-Fed drop yesterday. EUR/USD is down below 1.0800 for the first time in a month while the greenback is also steadier across the board. USD/JPY in particular is catching a modest bounce to 150.60 levels now, though price action has been volatile during the session.

In the equities space, tech shares continue to rally forward with S&P 500 futures up 0.4% and Nasdaq futures also seen thereabouts. Dow futures are flat though while European indices are suffering a poor start to August trading.

As we look to US trading later, the focus will slowly turn to the non-farm payrolls report tomorrow. But after the Fed yesterday, the risks there look pretty much asymmetric at this point.

This article was written by Justin Low at www.forexlive.com.

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