The Pound is holding ground against the US Dollar as expectations that the Bank of England may increase interest rates earlier than expected supported the British currency.
Against the Euro, Sterling advanced for a second consecutive day after yesterday’s speech by Bank of England Governor Mark Carney failed to convince investors that the Central Bank will maintain interest rates at their current low level. Carney’s comments to UK business leaders in Nottingham fell short of market expectations for an attempt to curb expectations of monetary tightening.
Investors see the UK’s continually improving economy as a reason for the BoE to raise rates before the UK unemployment rate falls to 7%, the target set by BoE policy makers before the Central Bank begins to curb its monetary easing programme.
“They have to try to decouple as best they can,” said Azad Zangana, an economist at Schroder Investment Management in London. “The problem is the market just doesn’t really believe them given the forward guidance they’ve provided.”
Adding to the Pound’s strength was news that Vodafone had resumed discussions on a plan for Verizon to buy out Vodafone’s stake in US joint venture Verizon Wireless.
Sterling will remain under pressure against the Dollar as tensions over possible military action against Syria keep investors on edge. If a strike does occur then the Pound will fall against the safe haven currencies such as the Japanese Yen and ‘Greenback’.
Tensions eased slightly late on Wednesday after President Barack Obama said that the U.S. has concluded that the Syrian government carried out a chemical weapons attack near Damascus, but added that he had not yet made a decision about whether to intervene militarily. The UK meanwhile has refrained from taking action until the United Nations weapons inspectors publish their report.
Current Pound Sterling (GBP) Exchange Rates:
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5506 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7326 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9892 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6448 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8551
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5027 >
(As of 10:30 am GMT)
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