While US nonfarm payrolls were arguably the most important economic release for the Forex market during the past trading week, the Bank of England policy meeting held special significance for the Great Britain pound.
Traders were rather optimistic ahead of the BoE meeting, leading to a rally for the sterling. Yet the rally came to an abrupt end after the central bank demonstrated dovish stance and revised growth forecasts down. Friday’s nonfarm payrolls were not helping either, leading to the currency’s worst two-day performance in nearly a month.
Meanwhile, the US dollar demonstrated an opposite performance. The greenback was rather soft throughout the week, especially after private employment data disappointed. But the dollar bounced by the weekend thanks to the better-than-expected official data.
GBP/USD declined from 1.3128 to end the week at 1.3043, retreating from the weekly high of 1.3267, which was the strongest level since September 15. GBP/JPY was from 145.19 to 146.77 during the week but pulled back to end trading at 144.38. EUR/GBP rallied from 0.8941 to 0.9022, and its weekly high of 0.9054 was the highest level since October 17.