The British pound has succumbed to profit taking in today’s trading after rising nearly rising nearly 4c against its US counterpart over the past week and some predict that with possible rate hikes on the way there is room for more gains.
Inflation in the UK now sits at 2.9 percent and is well above the BOE’s target rate and it looks like they may have no choice but to lift interest rates before the end of the year.
"If these data trends of reducing slack, rising pay pressure, strengthening household spending and robust global growth continue, the appropriate time for a rise in bank rate might be as early as in the coming months." Said BoE policymaker Gertjan Vlieghe.
BOE Governor Mark Carney is is in Washington today and is due to give a speech on monetary policy at 16.00pm (GMT). Investors will focus on the governor’s words for any signs of future rate hikes which follows on from comments he made last week
If Carney fails to touch on the question of interest rates the pound may see a further pullback,
“Following the impressive sterling rally, any dovish comment by Carney is likely to weaken sterling more than hawkish comments would be able to support it at these current levels,” Commerzbank AG analyst Ulrich Leuchtmann wrote.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this broker. Before deciding to trade foreign exchange you should consider whether you understand how CFDs work, your investment objectives, your level of experience and readiness of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.|