BoE Carney Boosts GBP With Closer Rate Hike Comments

The pound erased its early losses against its major opponents on Thursday, after the Bank of England governor Mark Carney said that it is nearing the point at which interest rates will begin to normalise, as economic outlook has improved a lot.

“With many of the conditions for the economy to normalize now met, the point at which interest rates also begin to normalize is getting closer,” Carney said in a speech at the Institute and Faculty of Actuaries General Insurance Conference , Wales .

The bank has no pre-set course and the timing would depend on the data, he told.

“Moreover, the precise timing of the first rate rise is less important than our expectation that, when rates do begin to rise, those increases are likely to be gradual and limited,” Carney added.

The pound recovered to 1.6331 against the greenback, from early 1-week low of 1.6275.

The pound rose back to 1.5507 against the franc, setting a 3-1/2-year high.

The UK currency re-approached the 178.30 level against the yen. The pound is thus heading to violate its early 2-day high of 178.48.

The pound extended rally to more than a 2-year high of 0.7786 versus the euro, up from yesterday’s close of 0.7820. This may be compared to an early low of 0.7829.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza