Pound Advances On BoE Rate Hike Hopes
September 18 2017 - 11:03PM
RTTF2
The pound climbed against its most major counterparts in the
Asian session on Tuesday, in response to comments from the Bank of
England Governor Mark Carney reiterating an interest rate rise in
coming months.
Speaking at the International Monetary Fund's headquarters in
Washington on Monday, Carney said that "some withdrawal of monetary
stimulus" would be necessary to bring UK inflation back to the 2
percent goal, although any rate rise would be 'gradual' and
'limited' "If the economy continues to follow a path consistent
with the prospect of a continued erosion of slack and a gradual
rise in underlying inflationary pressure then, with the further
lessening in the trade-off that would imply, some withdrawal of
monetary stimulus is likely to be appropriate over the coming
months in order to return inflation sustainably to target," Carney
said.
Investors await the U.S. Federal Reserve's two-day monetary
policy meeting that begins later in the day. While leaving interest
rates unchanged, the Fed may announce details on its trillions
balance sheet unwinding.
The pound weakened against its major rivals on Monday.
The pound firmed to 151.59 against the yen, its strongest since
June 2016. On the upside, 154.00 is possibly seen as the next
resistance for the pound-yen pair.
The pound edged up to 1.3022 against the franc and 1.3552
against the dollar, from its early lows of 1.2962 and
1.3494,respectively. On the upside, 1.31 and 1.38 are possibly seen
as the next resistance levels for the pound against the franc and
the dollar.
On the flip side, the pound weakened to a 4-day low of 0.8877
against the euro, off its early high of 0.8843. Further weakness
may take the pound to a support around the 0.90 region.
Looking ahead, Eurozone current account data and construction
output for July, as well as German ZEW economic sentiment index for
September are due in the European session.
In the New York session, Canada manufacturing shipments for July
and U.S. housing starts, building permits and export and import
prices for August are set for release.
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