Sterling weaker on BofE governor’s comments

Story link: Sterling weaker on BofE governor’s comments

In midday trade in New York sterling was 0.1 percent lower versus the US dollar to $2.0300 while it dropped 0.2 percent to ¥231.90 in relation to the yen and it was down 0.4 percent to £0.6835 against the euro.

The pound’s decline came after the governor of the Bank of England made comments indicating that interest rates might have peaked in the UK for the time being.

While he said that the Bank would only cut rates if credit market problems were hurting wider economic activity most analysts interpreted his remarks as meaning that rates will not go up to 6 percent any time soon.

The greenback, meanwhile, dropped by 0.4 percent to $1.3910 in relation to the euro, a new record low, as expectations that the Federal Reserve will cut interest rates in the US next week hurt the currency.

Political uncertainty after Prime Minister Shinzo Abe announced his resignation in Japan did not seem to influence the yen one way or the other.

The Japanese currency traded even at ¥114.20 against the US dollar and dropped 0.1 percent in relation to the euro, to ¥158.40.