By: DailyForex.com
The Pound Sterling edged higher against the US Dollar, trading at a 5-week peak above $1.30, as investors take comfort in the hawkish outlook of several of the Bank of England’s voting members. On Wednesday, Mark Carney, the BoE Governor, said that with the UK economy edging closer to full capacity, the central bank would begin debating the likelihood of an interest rate increase. It should be noted that only last week Carney suggested that the present economic environment did not seem to favor an upward rate adjustment. The BoE’s chief economist also lent his support to a rate hike; in an interview to the BBC, Andy Haldane said it was time to take a serious look at interest rates.
As reported at 11:01 am (BST) in London, the GBP/USD was trading at $1.2969, a gain of 0.32% and moving off the session peak of $1.30076. The pair had hit a session low of $1.29217. The EUR/GBP was flat at 0.88 Pence; the pair has ranged from a low of 0.87780 Pence to a peak of 0.88100 Pence.
Sterling Uncertainty Still a Possibility
Analysts say that higher push for Sterling is a combination of a surprisingly more hawkish BoE in addition to the formation of a minority government by the Conservative party. That’s not to suggest that there are no political concerns at all, however, as analysts point out that there is still an issue brewing in Northern Ireland which could also impact the Pound.