2023-11-21 22:59:03
London (awp/afp) – The pound climbed on Tuesday against the euro and the dollar, due to the weakness of the greenback, and the declarations of the governor of the Bank of England (BoE) tending towards maintaining a high interest rate policy despite slowing inflation in the United Kingdom.
At the fixing, at 10:00 p.m. GMT, the British currency rose by 0.27% against the greenback, to 1.2539 dollars, the highest in two and a half months, and by 0.53% against the euro, at 87 .02 pence.
The pound’s rise was helped by the weak dollar, as “slowing US economic activity and last week’s inflation data suggest a spike in Fed rates,” the US central bank said. recalled Mark Haefele, analyst for UBS.
“The market has completely given up on any anticipation of a rate increase (from the Fed) in December or January and even gives a 30% chance of a reduction in March,” added Christopher Vecchio, from Tastylive.
Speaking on Monday evening, BoE Governor Andrew Bailey said that despite the slowdown in inflation in the United Kingdom, his institution’s latest projections “(indicated) that monetary policy (would) likely remain restrictive for a certain time”, that is to say with high rates for a prolonged period.
Inflation slowed sharply in October in the United Kingdom, to 4.6% year-on-year, better than expectations, but it remains “far too high and we must ensure that we control it until the end of the year. 2% target,” Mr. Bailey repeated.
In the text of a conference transmitted in advance, he reiterated that it was “much too early to think about rate cuts”, and that the BoE remained “on the lookout for new signs of persistence of inflation which could require further increases in interest rates.
The BoE made 14 turns on its rates before deciding to maintain them at 5.25% during its last two monetary policy meetings.
“I do think the market is placing too much emphasis on recent data releases,” where “we are concerned about the potential persistence of inflation,” Mr. Bailey told the British Treasury Committee on Tuesday.
Investors were also awaiting Finance Minister Jeremy Hunt’s fall budget statement on Wednesday.
At issue is whether the government will stick to the “fiscal prudence” adopted so far, “refraining as much as possible from tax cuts and spending increases in order to provide a context fiscal policy that supports the Bank of England’s monetary tightening trajectory to combat inflation,” according to Interactive Investors analyst Victoria Scholar.
Tuesday price Monday price 10:00 p.m. GMT 10:00 p.m. GMT EUR/USD 1.0911 1.0940 EUR/JPY 161.91 162.33 EUR/CHF 0.9641 0.9682 EUR/GBP 0.8702 0.8748 USD/JPY 148 .31 148.39 USD/CHF 0.8837 0.8850 GBP/USD 1.2539 1.2505
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