The pound approached a two-year high versus the dollar after Bank of England policy maker Andrew Bailey said the central bank may take steps to prevent U.K. house prices from rising too quickly.
Sterling strengthened the most in six weeks against the euro last week as a report showing the U.K. unemployment rate unexpectedly fell to the lowest in 4 1/2 years added to signs the economic expansion is gathering pace. Standard & Poor’s affirmed the U.K.’s top credit rating on Dec. 20, saying Britain’s debt will peak sooner and lower than it had previously forecast because of the strengthening economy.
The pound climbed 0.2 percent to $1.6371 at 7:38 a.m. London time after rising to $1.6484 on Dec. 18, the highest since Aug. 2011. The U.K. currency was little changed at 83.64 pence per euro after appreciating 0.8 percent in the five-day period ended Dec. 20.
The Bank of England is “watching the housing market very carefully,” Bailey said, according to the Telegraph newspaper. The central bank may strengthen tests potential buyers must go through before getting home loans, the Telegraph reported Bailey as saying, citing an interview published on Dec. 21.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.