Pound Backs Off After Reaching Multi-Year Highs

The Great Britain pound fell against the US dollar and rose versus the Japanese yen at the current trading session, reversing its Monday’s movement. The sterling also continued to fall versus the euro. This does not necessarily mean that the UK currency lost its bullish momentum as it reached multi-year highs at the previous trading session.
The strength of the pound is the major theme on the Forex market right now amid otherwise quiet trading. It is really not a surprise considering that UK policy makers became bolder recently and are not shy to speak with confidence about future interest rate increases.
And this openness is not limited just to Bank of England Governor Mark Carney, a known hawk. BoE Deputy Governor Charlie Bean said yesterday that an interest rate hike “will be a symbolic step, because it will be an indication that we are on the road back to normality”. Considering the comments many analysts think that the BoE will raise borrowing costs at the beginning of the next year, while some believe that the central bank may act even this year.
GBP/USD fell from 1.6983 to 1.6963 as of 3:42 GMT today after rising to 1.7011 yesterday — the highest price since August 2009. GBP/JPY went up from 172.94 to 173.14 before retreating to its opening level. EUR/GBP was up from 0.7992 to 0.7997, while its yesterday’s low of 0.7959 was the weakest rate since October 2012.

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