Will the Direction of the Pound and the U.S. Dollar Change Following the Bank of England's Rate Hike?
06.11.2026
- Eurozone September Retail Sales
- U.S. October Employment Report
In the previous day’s U.S. currency trading, the U.S. dollar weakened against the yen amid risk aversion triggered by a sharp drop in U.S. stocks and a decline in U.S. Treasury yields. The dollar-yen pair rose temporarily to around 158.50 yen but fell to around 157.53 yen in the latter half of the New York session, closing at around 157.68 yen.U.S. initial jobless claims came in at 189,000, lower than the forecast of 196,000, signaling a resilient labor market; however, dollar buying failed to gain traction amid widespread selling of AI-related stocks. Ahead of today’s U.S. employment report, attention is focused on the battle for the 157-yen level.
European currencies were influenced by the Bank of England’s decision to raise its policy rate from 3.75% to 4.00%. Eight members voted in favor of the 0.25-point rate hike, while Committee Member Mann advocated for a 0.50-point increase, meaning all nine members supported the rate hike.The pound rose to the $1.3480 level immediately after the announcement but subsequently lost momentum, closing near $1.3450. Meanwhile, the euro rose as high as $1.1268 before falling to around $1.1203. European currencies also showed a lack of direction.
Today’s economic indicators include Germany’s September industrial production at 4:00 p.m. and the eurozone’s September retail sales at 7:00 p.m. In Europe, New York Fed President Williams is scheduled to speak at 6:30 p.m., and his views on monetary policy will be closely watched.In the U.S., October nonfarm payrolls, the unemployment rate, and average hourly earnings will be released at 10:30 p.m., and Canadian employment data is also due at the same time. We will be watching to see how the pound reacts to the Bank of England’s rate hike the previous day and how the dollar responds to the U.S. employment report.
Author: Keisuke Sakurai
