Pound Touches One-Week High as McCafferty Comments on Stimulus

U.K. pound
  • Pound Touches One-Week High as McCafferty Comments on Stimulus

The pound climbed for a second day against the dollar amid further evidence of a split between Bank of England policy makers, with Ian McCafferty suggesting that he favored a faster unwinding of the central bank’s quantitative-easing plan.

The pound was also boosted as U.S. Federal Reserve Chair Janet Yellen signaled on Wednesday the central bank won’t rush to tighten monetary policy. Sterling has recently been buffeted by a divide in the Monetary Policy Committee’s outlook for interest rates, against a backdrop of economic reports that have fallen short of analysts’ forecasts. The comments from McCafferty, one of three officials to vote for a rate hike last month, come after fellow policy maker Ben Broadbent said on Wednesday he isn’t ready to support an increase in rates.

The pound rose 0.3 percent to $1.2944 as of 9:43 a.m. in London. The currency earlier reached $1.2952, its highest since July 6.

  • Leveraged names still prefer to fade rallies north of $1.2970 and up to $1.3030, according to two Europe-based traders
    • Few stops triggered above $1.2920, while GBP/JPY demand spills over, says one of the traders
  • Analysts at Commonwealth Bank of Australia have “modestly lifted” their GBP/USD forecasts “but continue to see large downside risks”
    • They see the pair ending 2017 at $1.32, compared to the earlier forecast of $1.30. Sterling will climb to $1.35 by end-2018, compared to earlier call of $1.33
  • U.K. house-price growth cooled in June as the inconclusive election weighed on demand, according to the Royal Institution of Chartered Surveyors in a report released Thursday

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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