British Pound Struggles to Find Direction Despite Hawkish Comments from BoE Governor

The British pound today struggled to find direction as it demonstrated mixed results against its main competitors such as the US dollar, the euro, and the Japanese yen. The Bank of England Governor, Mark Carney, told the UK Parliament that a smooth Brexit process could lead to a faster rate of hiking interest rates.

The British pound gained against the euro and the japanese yen, but was weaker against the US dollar during the European session.

The pound rallied against the yen and the euro boosted by Carney’s comments that if the UK signs a “bold, ambitious trade deal” with the European Union, it could trigger faster economic growth, which would necessitate faster rate hikes. Carney’s comments that the BoE would look through January’s higher inflation figures as they were largely caused by the weaker pound contributed to the pound’s weakening against the US dollar.

The pound’s performance was also affected by the stronger US dollar despite weaker Markit manufacturing sector, and services sector data reported in the US today.

The article 50 bill debate in the House of Lords is likely to affect the pound, especially if the two houses of parliament do not agree on any amendments made to the bill, which might delay the passing of bill.

The GBP/USD pair was trading at 1.2461 as at 18:07 GMT having recovered from a daily low of 1.2399. The EUR/GBP pair was trading at 0.8462 having hit a daily high of 0.8415. The GBP/JPY was trading at 141.48 having opened the day’s session at 141.25.

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