The British pound finished up on Wednesday’s trade following the statement of a policymaker form Bank of England saying that he anticipated to back a rate hike this 2017. Meanwhile the Norwegian crown and Canadian dollar, which are a commodity-linked currency, struggled to earn gains due to slump in oil prices.
Global investors are currently focusing on United Kingdom’s political developments as Prime Minister Theresa May’s Conservative Party is still on talks with Democratic Unionists Party (DUP) in Northern Ireland. This is an effort to form a government. BMO Capital Markets’ currency strategist in London Stephen Gallo said the political uncertainties inserted in the British pound seems like it’s ready to lengthen into next week, with the Conservative Party and the DUP still not finalising talks.
The Bank of England policymaker is likely to back an interest rate hike this December 2017, this made the pound sterling advance as much as half a cent, it immediately settled above $1.27 and overturned a decline below $1.26 on the previous trade. This is according to Andy Haldane, chief economist at BoE.
The statement of Haldane incited a non-dovish manner that governor Mark Carney, who in a discussion said now is not a good time for an interest rate hike last Tuesday. The remarks also brought out a developing division at the central bank last week. Three out of eight policymakers are in favor for interest rates to be lifted.
Looking at other currencies, the Canadian dollar edged down by 0.2 percent to finish at C$1.3289, making it far from its 3 month high of C$1.3165 a dollar, while the Norwegian crown was weakened versus the U.S. dollar.