GBP

Sterling managed to recovery all the ground it lost throughout Wednesday after Bank of England Governor Andrew Bailey testified before the commons late in the afternoon . The pounds gains came after Bailey told the Treasury committee that MPC members were split 4-4 in August on whether “minimum necessary conditions were met to raise interest rates” . However Bailey warned that the UK’s recovery from the pandemic is slowing amid supply chain disruptions and staff shortages . Britain’s labour shortages were also highlighted by a survey from the Recruitment and Employment confederation which said employers are facing the most severe shortage of job candidates on record due to the post-lockdown surge in the economy and Brexit, which is pushing up starting pay for permanent staff at an unprecedented pace .

EUR
According to a poll of economists by Reuters , the European Central Bank is expected to claw back stimulus on Thursday, taking a small step towards unwinding the emergency aid put in place during the pandemic . The majority of those polled see the ECB bond buying under its pandemic emergency purchase programme (PEPP) falling to possibly as low as 60 billion euros a month from the current 80 billion, before a further fall early next year and the scheme’s end in March. This token move is expected to reflect the cautious optimism expressed recently by several Central Bankers . Traders will pay close attention to not only the PEPP verdict and ECB statement but also President Christine Lagarde’s press conference which follows .

USD
Federal Reserve policymakers on Wednesday signalled that the U.S. central bank remains on track to trimming its massive asset purchases this year, despite the slowdown in jobs growth seen in August and the impact of the recent COVID-19 resurgence. St Louis Fed President James Bullard said that they could begin tapering this year into the first half of next year and John Williams, New York Federal Reserve President said that “it could be appropriate to start reducing the pace of asset purchases this year” if the economy continues to improve, as he anticipates.