Pound Dropped Off After Carney Comments
- Posted by currencies in Bank of England, Bremain, Brexit, Currency, Dollar, EUR, GBP, Mark Carney, No Deal, Sterling, UK, Uncategorised
- January 10, 2020
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Yesterday the British Pound fell to a two-week lows as
the head of the BoE Mark Carney stated that an interest-rate cut could still be
on the horizon.
Carney said in his speech on Thursday morning that the central bank was debating the uses of near-term stimulus, adding that a Brexit uncertainty was still present and that U.K. economic growth was below potential.
This statement led to the markets to think a that chance of a BOE rate cut by the end of the year is increasingly more likely. The pound fell as much as 0.6% to $1.3018, the lowest since Dec. 27. It also weakened as much as 0.6% to 85.28 pence per euro.
The market now prices about a 60% chance of a BOE rate cut by December 2020, and a 15% chance of a move this month compared to just 6% a day ago.
In the US with the ongoing trade war with china set to enter into the Phase 2 of negotiation President trump has now stated he may wait will after the elections.
A complete reversal of him comments saying they will start negotiation Phase 2 straightaway.
With no pen not seen to be on paper on phase one this has put more uncertainty into the idea of a deal being sorted anytime soon putting more strain on the Greenback. In the case of the US job market continuing to show hardly any signs of weakness the Dollar may strengthen much more significantly in the course of next few days.
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