FX round-up: Cable bounces despite expectations for further BoE easing

Cable registered a small bounce ahead of the Monetary Policy Committee's meeting on the next day and following the previous session's large drop on the back of weaker-than-expected CPI numbers.

What at least at first glance appeared to be a better-than-expected UK employment report might seem to buttress views that the Bank of England would hold off from further easing at Thursday's policy meeting.

However, come November analysts at Barclays still expected the MPC to cut Bank Rate by 20 basis points

"The fact is that current BoE forecasts are still (just) above consensus for this year and next, and do not indicate a recession. The MPC said it would vote for a cut before year-end if data were in line with that scenario, which has broadly be the case," the broker said in a research note sent to clients on 9 September.

They reaffirmed that view following Wednesday's August employment report, telling clients: "Overall, we see the current environment as characterised by rising uncertainty on the back of the EU referendum outcome."

"News that demand for UK money market funds has surged could be another indication of a reluctance to invest in the current environment. Given that the start of the Brexit talks will start to give form to the degree of uncertainty facing the UK, we anticipate that GBP remains vulnerable medium-term," chipped in Rabobank's Jane Foley.

Euro/dollar advanced 0.26% to 1.1249, with similar gains in cable, which bounced back by 0.26% to 1.3229 following the previous session's losses.

Japan's yen also gained versus the greenback, with dollar/yen slipping 0.21% to 102.34, albeit the large losses sustained on the day before.

The US dollar spot index was off by 0.30% to 95.34 as of 1940 BST.