You've landed on our UK website.
Click here to visit our USA website.

If you are having difficulty locating the information you require, we're here to help. Just get in touch and we will do our best to assist you.

GBP rockets further as notable dove becomes hawkish

currency-newsGBP rockets further as notable dove becomes hawkish
Upbeat comments from a surprising source within the Bank of England (BoE) set the pound off on another bullish run on Friday.

Things have calmed down today ahead of a speech from BoE Governor Mark Carney. GBP/EUR is currently trading at €1.1377, GBP/USD is at US$1.3588. GBP/AUD has fallen -0.2% to A$1.6948, while GBP/NZD is holding at NZ$1.8594. GBP/CAD has slipped to C$1.6553.

Read on to find out who made those exciting remarks on Friday…

What’s been happening?

The pound went rocketing higher once again on Friday, following upbeat comments from Bank of England policymaker Gertjan Vlieghe. He said that it may be appropriate to raise interest rates as soon as the coming months, and that more than one hike will probably be necessary. This means that interest rates are likely to rise above the 0.5% mark at which they had rested for several years prior to the referendum.

Vlieghe’s comments were particularly impactful as he is known as the most dovish member of the Monetary Policy Committee (MPC). If even the most cautious policymaker in the room reckons it’s nearly time to raise interest rates, then it is likely that most - if not all - the other MPC members will also support raising borrowing costs.

GBP/EUR shot higher, although elsewhere the euro was on good form. Stronger than expected wage growth data for the second quarter of the year helped improve the inflation outlook and therefore raised hopes further that the European Central Bank (ECB) is likely to begin tapering quantitative easing soon.

GBP/USD surged on Friday, although even without the latest Bank of England news it is likely that Sterling would have registered gains. The US dollar was on poor form after the day’s key retail sales data for August disappointed. Not only was July’s growth revised back to 0.3%, but sales in August were shown to have contracted -0.2% instead of slowing to 0.1% as expected.

What’s coming up?
Bank of England Governor Mark Carney is set to give a speech today at the International Monetary Fund (IMF) in Washington, DC. Should he make any hawkish noises regarding UK monetary policy or Brexit then the pound could notch up further gains.

As well as reacting to the finalised Eurozone consumer price index data released this morning, the common currency could also be moved by speech from the ECB Executive Board member Sabine Lautenschlaeger.

A lack of meaningful US data on the calendar today will leave UK developments in charge of GBP/USD exchange rate movement.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

Check our exchange rate

Thanks, we'll be in touch.

Check your inbox - one of our currency experts will be in touch to complete your quote.

If you want see our online exchange rates straight away, simply register online & log in.