In spite of Dollar rallying strong, pound has been able to hold its ground against it so far, which is pushing it higher against other currencies, such as Euro, Yen, Loonie. Focus has now been shifting to the fact is that Bank of England (BOE) is the only Central Bank left after FED in the developed world, which is likely to hike rates.
BOE's governor, Mark Carney, has cleared the air so many times regarding rate hike that doubts is clearly dissipating. Expectations for rate hike, some time next year is clearly getting stronger.
Bank of England (BOE) governor provided first clue regarding rate hike last evening in a speech in Lincoln.
- MPC members will be debating on the exact timing for the first rate hike, at the end of this year. Which means BOE will be following FED in action early next year.
However, Mr. Carney also mentioned that rate rise will be much slower and rates will be much lower, about half of their historical average in the medium term, since growth is much weaker than before.
Pound has taken support around 1.556 last evening and traded as high as 1.567 against dollar. Currently trading at 1.564, further rise towards 1.59 seems likely.
