For the first time in over 10 month, the British pound sterling hit an outstanding $1.32. This is supported by investors who are eyeing the Bank of England’s Super Thursday, for a steer on whether record-low interest rates could soon be lifted for the first time in more than a decade. BoE’s Super Thursday will occur this week, making investors excited.
The Bank of England will publish a quarterly Inflation report on Thursday, with economist and investors expected BoE to push up its inflation calculations slightly but to lower its projection for growth after the weak start of the year. In relevance to this, Alvin Tan, Sociate Generale’s currency strategist said that there is a genuine debate in the bank—with regards over raising rates, however, they are not expecting any hikes in the next year. He also added that there’s clear evidence that the economy is slowing down, and even though inflation is rampaging, the momentum seems to have receded.
In accordance to this, the British pound has been granted support in the past weeks by investors with the expectations that the Bank of England might finally be getting prepared for an interest rate hike after series of aggressive claims from policymakers; yet Mark Carney, Bank of England’s Governor, as well as most of his top officials have not been announcing anything, regarding the rate hike.
In addition, the British pound sterling has recovered an approximately half of its post-Brexit vote falls against the greenback, which is down by 12% compared to the 23.5% in October 2016. As the sterling advances against the U.S. dollar, the currency remained around half a cent away from its lowest levels against the euro in nine months, which is 89.50 pence EURGBP=D3, down by 0.1% on the day.