News Column

Dollar Eases Versus Sterling On BoE Rate Hike Chatter

August 18, 2014

WASHINGTON (Alliance News) - The dollar was narrowly mixed Monday, giving back recent gains against the sterling after some relatively hawkish comments from the UK's top central banker.

Bank of England Governor Mark Carney told The Sunday Times in an interview that interest rates could be raised even before real wages turn positive.

His remarks come less than a week since the BoE's annual inflation report hinted that no interest rate hike is imminent.

The dollar slipped to USD1.673 versus the sterling, down a recent 4-month high of USD1.6650.

There was little reaction to other economic news out of Europe, including data showing the eurozone trade surplus to have increased unexpectedly in June.

The dollar edged up to USD1.3360, hovering near its highest since last November.

Traders have been betting the European Central Bank will eventually capitulate to deflation and sluggish economic growth by offering additional stimulus.

The dollar remained stuck at Y102.50, little changed from the start of the year.

Federal Reserve officials will be meeting in Jackson Hole, Wyoming later this week.

Although no monetary policy announcements are forthcoming, speeches from the central bank's annual symposium provide some insight about when the Fed intends to raise interest rates.

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Source: Alliance News

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