UK pound is pulling back today, following a strong run earlier. Sterling has been enjoying unprecedented strength, and is now taking a bit of a breather as traders and others re-assess the situation.
UK pound has been enjoying quite the bull run recently. However, today the UK pound is pulling back a bit against its major counterparts. Rather than being seen as poised to move further ahead, some think that the Bank of England has a lot to respond to.
First of all, recent strength in the sterling is impacting the economic recovery in the United Kingdom. A strong currency means that economic recovery is going to be a bit slow. Even though the British economy has been picking up lately, that doesn’t mean that the trend will continue. A strong pound could hinder recovery efforts, and that means the Bank of England will be forced to respond.
There have been remarks from policymakers that interest rates will gradually rise 3 per cent over the next three years, but it is uncertain when such a process will start, especially since the asset purchase program is still in place.
At 13:01 GMT GBP/USD is down to 1.6817 from the open at 1.6842. EUR/GBP is up to 0.8108 from the open at 0.8102. GBP/JPY is down to 171.4390 from the open at 171.6850.
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