GBP/USD flirts with 1.56 after trading around 1.5460 before these comments hit the wires.
Carney said the time for a rate hike is getting closer. He said this in a testimony in the Inflation Report Hearings.
This comes after inflation came out flat, within expectations but certainly not warranting a rate hike, at least not now. I
n the past, Carney made similar bullish hints, most notably in the Mansion House Speech in June 2014. This sent cable above 1.70 at the time, especially as it came on thin liquidity around the opening game of the World Cup.
Despite ongoing growth and all such comments, rates are unchanged at 0.50% since 2009 and in recent months, the Monetary Policy Committee voted unanimously for keeping the rates unchanged.
Carney also had interesting comments about Greece. He said that Greece’s debt profile is not sustainable and that execution of the Greek deal will be problematic. He also says there is risk of contagion from Greece. He said that “Herculean efforts†are needed from all sides.
The pound has been resilient in weathering the dollar storms in recent months, as the Bank of England was seen as raising the rates just after the Fed. However, at times there were doubts this would really happen anytime soon.
Here is how this leap looks on the chart.
