Pound Climbs After BoE McCafferty Proposes To Unwind QE Early
13 Luglio 2017 - 08:44AM
RTTF2
The pound advanced against its major counterparts in the
European session on Thursday, as Bank of England member Ian
McCafferty struck a hawkish tone on monetary policy, saying the
central bank should consider ending its asset purchase program
sooner rather than later.
With the other banks thinking about normalizing balance sheet,
it is appropriate for the BoE to review its policy of leaving QE
unchanged until interest rates are close to 2 percent, McCafferty
told the Times.
"I think it's a question that needs a bit of asking."
McCafferty also hinted that he would back for an interest rate
hike in August as he did in June.
The U.K. economy could withstand higher rates, McCafferty said,
citing strong jobs data and possibility of inflation overshoot.
Risk-on mood prevailed as Fed Chair Janet Yellen's comments
about gradual policy tightening soothed fears of a central bank
moving too fast.
Investors awaited further comments from her second day of
testimony on Capitol Hill later today.
In its quarterly economic survey, the British Chambers of
Commerce said that the U.K. economy grew at a subdued rate in the
second quarter of 2017.
The balance of firms reporting increasing domestic sales in the
manufacturing sector held steady at +20, while the balance
reporting export sales rose marginally to +27 from +26.
The pound showed mixed trading in the Asian session. While the
pound held steady against the franc and the euro, it rose against
the yen and the greenback.
The pound climbed to a 6-day high of 1.2952 against the
greenback, compared to 1.2884 hit late New York Wednesday. The
pound may possibly target 1.32 as the next resistance level.
Reversing from an early low of 1.2420 against the Swiss franc,
the pound hit a 2-day high of 1.2484. Continuation of the pound's
uptrend may see it challenging resistance around the 1.27
region.
The pound firmed to a 6-day high of 0.8808 against the euro,
after having fallen to 0.8874 at 1:30 am ET. The pound is seen
finding resistance around the 0.86 area.
Latest figures from Destatis showed that Germany's consumer
price inflation increased as initially estimated in June.
The consumer price index rose at a slightly faster pace of 1.6
percent year-over-year in June, following a 1.5 percent climb in
May. That was in line with the flash data published on June 26.
The pound advanced to a 2-day high of 146.53 against the
Japanese yen, from a low of 145.55 hit at 11:45 pm ET. If the pound
extends rise, it may target 148.5 as its next resistance level.
Looking ahead, Canada new housing price index for May, U.S. PPI
for June and U.S. weekly jobless claims for the week ended July 8
are slated for release In the New York session.
At 10:00 am ET, Federal Reserve Chair Janet Yellen testifies on
the Semiannual Monetary Policy Report before the Senate Banking
Committee, in Washington DC.
At 11:30 am ET, Federal Reserve Bank of Chicago President
Charles Evans is expected to speak about the economy and monetary
policy at the Annual Rocky Mountain Economic Summit in Idaho,
U.S.
At 1:00 pm ET, Federal Reserve Governor Lael Brainard is
scheduled to speak about monetary policy at the National Bureau of
Economic Research, in Massachusetts.
At 2:00 pm ET, U.S. Federal monthly budget statement is slated
to publish.
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