Pound Drops As BOE's Cunliffe Wary Over Nov. Rate Hike
24 Ottobre 2017 - 10:45AM
RTTF2
The pound weakened against its major rivals in the European
session on Tuesday, as the Bank of England Deputy Governor Sir Jon
Cunliffe remarked that a rate hike in November remained an "open
question".
Speaking to the Western Mail, the BoE policy maker said that
while the economic growth has slowed, real wages have declined due
to an increase in inflation since the Brexit referendum.
While rates are certainly to be higher in three years time, the
exact timing of a rate hike is an open question, he told. His
comments added to uncertainty about the BoE rate hike in
November.
Speaking to the House of Commons, UK Chancellor of the Exchequer
Philip Hammond said that the U.K. government is committed to trim
the budget deficit in a "measured and balanced way."
"Increasing activity in the construction sector is a very good
way of creating jobs but ... at 4.3 percent, our economy is
approaching full employment, the output gap is extremely small," he
added.
The pound dropped to a session's low of 0.8928 against the euro,
following an advance to 0.8894 at 12:45 am ET. If the pound extends
decline, 0.92 is possibly seen as its next support level.
Flash survey data from IHS Markit showed that the euro area
private sector expanded strongly in October but the pace of growth
slowed from September.
The flash composite output index fell more-than-expected to 55.9
in October from 56.7 a month ago. The score was forecast to drop
marginally to 56.5.
The pound edged down to 1.3166 against the greenback, from a
high of 1.3227 hit at 11:30 pm ET. The next possible support for
the pound is seen around the 1.30 area.
The pound pared gains to 149.71 against the yen and 1.2988
against the franc, from its early highs of 150.08 and 1.3028,
respectively and held steady thereafter. The pound closed Monday's
trading at 149.69 against the yen and 1.2998 against the franc.
Looking ahead, Markit's preliminary U.S. manufacturing PMI for
October is set for release in the New York session.
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