- Posted by currencies in Rate Alerts
- July 3, 2017
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The exchange rates from this morning are listed at the bottom of this article. Please note they are for indication only, for live quotes please contact us.
The pound recorded its best weekly performance against the dollar in almost eight months last week. It climbed almost 2.5 percent to reach as high as $1.3030 after BoE Governor Mark Carney said a rate rise was likely to be needed as the economy came closer to running at full capacity, and that the Bank would debate this in the coming months.
For the quarter, sterling’s performance was its best in two years, benefiting from broad dollar weakness as U.S. economic data disappointed and as investors’ hopes for pro-business, pro-growth policies from President Donald Trump faded.
Following Carney’s comments – which were followed by similar remarks by the BoE’s chief economist Andy Haldane – investors moved to price in around a 50 percent chance of a rate hike by the end of the year.
But not all analysts are convinced that the BoE will follow through with its hawkish rhetoric as Britain negotiates its way out of the European Union. Even if rates increase slightly, that will not necessarily spell the start of a steady policy tightening cycle, they say.
British factories grew more slowly than expected in June as export orders rose at the weakest pace in five months, according to a survey today that could make Bank of England officials think twice about raising interest rates.
The Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell to 54.3 from a downwardly revised 56.3 in May, a three-month low and below all forecasts in a poll of economists that pointed to a reading of 56.5.