GBP/USD Rallies to 1.6720 after BOE’s Interest Rate Comments

Sterling rose on Monday after the Bank of England indicated that UK interest rates may have to rise even before wage growth recovers, backtracking from earlier comments that prompted markets to push out the risk of a rate hike.

Sterling rose as high as $1.6739, from around $1.6689 late in New York on Friday. It also firmed against the euro, which dipped below 80.00 pence from around 80.23.

Just last week, the pound plumbed a four-month trough of $1.6657 after the BOE slashed its forecast for wage growth and stressed that any interest rate hike would depend largely on an improved outlook for pay.

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