Pound Sterling Forecast More Positive As BoE Governor King Steps Down

June 19, 2013 - Written by John Cameron

STORY LINK Pound Sterling Forecast More Positive As BoE Governor King Steps Down

This morning’s session was notable for the publication of the minutes of June’s Bank of England monetary policy committee meeting. The memos of this month’s UK central bank get-together revealed that, once again, the nine man committee was split on whether to augment the £375bn which has already been allocated to Britain’s Quantitative Easing programme. The 6-3 vote against more QE was not unexpected, however things might well be very different at July’s meeting when a new man takes the helm at Threadneedle Street. Mark Carney, the erstwhile Governor of the Bank of Canada, takes over as Governor of the Bank of England on 1st July. The man he replaces, Mervyn King, was one of the three dissenters who voted for an extension to the BoE’s asset purchase scheme.

Carney was always considered to be an arch-dove and a firm advocate of ultra-loose monetary policies including QE. That was until he appeared before the House of Commons Treasury Select Committee in the early part of this year. His comments in parliament, which hinted at a more cautious wait-and-see inflation targeting approach to the UK’s monetary policy, suggest that he may not necessarily vote for more QE at his first meeting. If the voting split turns out to be 7-2 next month, then forecasters expect Sterling to register healthy gains against the other major global currencies.

Elsewhere, last night’s Japanese trade figures, which revealed that outward shipments from Asia’s second economy expanded at their fastest annualised rate for some three years last month, have served to trigger a strengthening of the Yen which has caused the Pound to Yen exchange rate (currency : GBP JPY) to drop to 148.86 earlier. However, the Japanese data has failed to elicit a more wide-spread ‘risk on’ trading environment. Global shares have struggled to break into positive territory on the day as investors sit on their hands ahead of tonight’s hotly anticipated Federal Reserve FOMC policy decision.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Japanese Yen Forecasts Pound Sterling Forecasts