The GBP/USD currency pair today rallied to new highs following hawkish comments by the Bank of England‘s MPC member Gertjan Vlieghe. The policy-maker’s comments were taken from his early morning speech on ‘real interest rates and risks‘ and published by Reuters.
The currency pair rallied by over 200 points after Vlieghe’s comments to extend yesterday’s rally, which was triggered by the hawkish tone in the BoE minutes.
The pair’s rally was mainly triggered by the highlight of Vlieghe’s speech in which he stated that it is almost time for the BoE to raise interest rates. Vlieghe’s speech also highlighted the fact that wage growth in recent months has not been as weak as in the past. He also noted that there is a risk related to the Brexit process, which might have a negative effect on the UK’s economy. The pound’s rally was also boosted by the hawkish tone outlined in the Monetary Policy Committee’s latest policy decision, which was released yesterday.
The selling mood around the US dollar also contributed to the Cable’s upward momentum. The greenback has been largely weaker against the pound and the euro given that the US Dollar Index, which tracks the greenback’s performance against a basket of its peers, hit a low of 91.76 earlier today.
The currency pair’s future performance is likely to be affected by several releases from the US docket including advance retail sales and UoM confidence survey scheduled for later today.
The GBP/USD currency pair was trading at 1.3576 as at 11:06 GMT having rallied from a low of 1.3384 earlier today. The GBP/JPY pair was trading at 151.05 having rallied from a low of 147.26.
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