The British pound sterling’s consecutive gains were put to a halt on Monday, as the U.S. dollar advances and recovers its losses from the previous week. The British pound held firm and was flat against the greenback and settled at $1.4070, which was 0.7% higher from the currency’s previous settlement and 2.5% below its strongest level of $1.4346 capped in late-January of 2018.
Despite of this, comments from the BoE had driven investor’s bets that the anticipated interest rates is likely to occur as early as May. According to Dave Ramsden, a deputy governor at the BoE along with one policymaker that the central bank is needed to raise British interest rates sooner than anticipated. Ramsden’s claims heightened analysts and investors’ bets towards the anticipated interest rate hike in May.
In accordance to this Derek Halpenny, European head of Global Markets at MUFG mentioned that the Bank of England’s claims gave the pound support and reinforcement which drove the sterling to be firm against the recovering greenback. Another essential key that helped support the pound’s stance was Jeremy Corbyn’s statement, in which Corbyn mentioned that his Labour Party desired Britain to negotiate a new customs accord with the European Union to ensure a tax-free trade after Brexit.
Derek Halpenny added that even though Jeremy Corbyn’s announcement sounds optimistic, analysts and investors need to see more specifics from the Labour Party on what they plan to do.