The British pound rebounds as the US dollar weakens on hopes of a deal with Iran
GBP/USD rallied modestly on Friday after rebounding from intraday lows, helped by improving risk sentiment on a potential US-Iran peace deal. At the time of writing, the pair is trading around 1.3460 and is on track to end the week with little changed.
A senior Iranian source told Reuters that “Iran and the United States have reached a political agreement, but it has not yet been finalized.” This followed reports that the two sides had reached a proposed 60-day Memorandum of Understanding (MOU) that would extend the current ceasefire and reopen the Strait of Hormuz. Read more…
The British pound is rising against the Japanese yen and Bailey is adopting a hawkish tone
GBP/JPY is paring some of its earlier intraday losses on Friday as the British Pound (GBP) gains support following hawkish comments from Bank of England (BoE) Governor Andrew Bailey. At the time of writing, the cross is trading around 214.15 after recovering from the intraday low of 213.59.
Speaking in Iceland, BoE Governor Andrew Bailey said that “the softness of the economy and uncertainty around the Iran war shock mean that temporarily tolerating above-target inflation is the right way to approach policy trade-offs.” He added that the central bank has already “tightened policy significantly” after taking expected interest rate cuts off the table in response to the shock to market expectations. Read more…
British Pound falls towards 1.3400 as BoE Bailey gains momentum
The British Pound (GBP) is falling against the US Dollar (USD) on Friday, hitting session lows of 1.3408 so far, indicating a moderate weekly decline. Bank of England Governor Andrew Bailey has virtually rejected any enhance in interest rates in the near future, while US data increases pressure on the Federal Reserve (Fed) to tighten monetary policy.
Bailey confirmed at the Reykjavik economic meeting that “there are grounds for temporarily tolerating above-target inflation” and added that economic activity and the labor market had an impact on the second-round effects. BoE chied also stated that after removing the expected cuts, the bank, in response to the shock, had already significantly tightened its policy in relation to market expectations. Read more…
