Pound Falls as Carney Waters Down Rates Move

The pound fell versus 13 of its 16 major peers after Bank of England Governor Mark Carney said wages weren’t rising as quickly as the central bank anticipated, damping speculation of an imminent increase in interest rates.

Sterling weakened from near the highest level in more than five years versus the dollar. Carney, who signaled two weeks ago the possibility of a BOE move sooner than markets had anticipated, also said today there’s scope to absorb more slack in the economy before the central bank’s benchmark rate climbs from a record-low 0.5 percent. Citigroup Inc. technical strategists advised selling the pound.

“It’s notable that Carney focused on the lack of wage growth,” said Peter Kinsella, a foreign-exchange strategist at Commerzbank AG in London. “As a result, there’s been some marginal position shifting with sterling weakening. If wage growth continues to disappoint, the BOE will have to take that into account.”

Bloomberg

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