Pound Slides After BoE Broadbent's Remarks
May 13 2019 - 12:31AM
RTTF2
The pound fell against its major counterparts in the early
European session on Monday, after Bank of England Deputy Governor
Ben Broadbent cautioned that a prolonged delay to Brexit would
damage the long-term economic outlook and asserted that further
interest rate hikes would be "gradual."
Speaking at the Press Association news agency, Broadbent
remarked that investment has been experiencing the consequences of
the uncertainty about Brexit and particularly the possibility of a
bad outcome.
"If you continually expect news to arrive imminently - a
resolution - then that can have quite a depressing effect on
investment," he said.
Broadbent emphasized that future interest rate increases would
be limited and gradual.
Broadbent's comments were in contrast with those made by BoE
Governor, who said earlier that increases would need to be more
frequent than financial markets expect.
Trade concerns persisted as the U.S.-China trade talks ended
without an agreement.
U.S. President Donald Trump on Sunday defended his tariff
policy, saying we are right where we want to be with China.
"Remember, they broke the deal with us & tried to
renegotiate. We will be taking in Tens of Billions of Dollars in
Tariffs from China," Trump said on Twitter.
The currency traded mixed against its major counterparts in the
Asian session. While it held steady against the euro and the
greenback, it fell against the yen and the franc.
The pound declined to a 4-day low of 142.53 against the yen,
from a high of 142.87 hit at 2:45 am ET. The pound is likely to
target support around the 140.00 mark.
Preliminary data from the Cabinet Office showed that Japan's
leading index reached its lowest level since mid-2016.
The leading index, which measures the future economic activity,
declined to 96.3 in March from 97.1 in February. The score matched
economists' expectations.
The pound fell back to 1.3123 against the franc, not far from a
4-week low of 1.3119 seen at 5:30 pm ET. The pound is seen finding
support around the 1.29 level.
Pulling away from a high of 1.3017 touched at 2:45 am ET, the
pound reversed direction, falling back to 1.2998 against the
greenback. The next possible support for the pound is possibly seen
around the 1.28 level.
The pound edged down to a session's low of 0.8642 against the
euro and held steady thereafter. The pair was valued at 0.8635 when
it ended deals on Friday.
In today's events, Federal Reserve Governor Richard Clarida will
deliver a speech at an event hosted by the Federal Reserve Bank of
Boston at 9:05 am ET.
Sterling vs CHF (FX:GBPCHF)
Forex Chart
From Apr 2024 to May 2024
Sterling vs CHF (FX:GBPCHF)
Forex Chart
From May 2023 to May 2024