Their pairing – one of the forex majors – is also known as the “cable”, referring to the undersea telecoms cables that used to carry GBP/USD bid and ask quotes across the Atlantic Ocean between London and New York. The GBP vs USD chart shows how many US dollars – the quote currency – are needed to buy one pound – the base currency.īacked by two large economies, both the GBP and the USD are some of the oldest and most traded currencies in the world. The GBP/USD pair represents the relationship between the world’s most influential currencies: the United Kingdom’s pound and the United States’ dollar. "In the context of April's shock inflation print, this puts significant pressure on the Bank of England to increase rates again at next week’s policy meeting – another 25bp hike seems the most likely option," said Hussain Mehdi, macro & investment strategist at HSBC Asset Management.GBP/USD Browse our live chart to get all the information you need on the GBP to USD rate today. Persistently high wage growth makes the BoE's task to get inflation back to its 2% target even more difficult, as it leaves less room to bring price pressures down. Treasuries than at any point since early 2009, reflecting the extra risk premium investors demand to hold British government debt right now, theoretically giving the pound an edge. Kumar said the BoE was in a difficult position as "there is a large refinancing wave in the June to September period," which means the central bank may not have room to hike aggressively.Ī 10-year UK gilt now yields more over 10-year U.S. Jefferies interest rate strategist Mohit Kumar said gilts have come under pressure due to reports of lenders pulling deals and the uncertainty in modelling the impact of higher mortgage rates, particularly given the rise in near-dated gilt yields. Others, such as Nationwide Building Society, have raised their mortgage rates, along with NatWest (NWG.L) and Santander (SAN.MC), according to Britain's Guardian newspaper. The effects of the BoE's series of rate hikes is now filtering through, especially as fixed-rate home loans come up for renewal.Ī number of major lenders, including HSBC (HSBA.L), have withdrawn mortgage products for customers applying via broker services, reflecting the broader impact on Britain's housing market of higher borrowing costs. Typically, there is a lag of several months between a central bank raising interest rates and the impact on the real economy. "We’re going to end up with a much bigger interest-rate burden at a government level and at an individual level," Brown said. "The market is saying the BoE is just going to have to keep raising rates," Michael Brown, a markets strategist at broker TraderX said. The euro was last down 0.15% at 85.85 pence. In the United States, consumer price growth eased in May to the slowest rate in more than two years, supporting expectations that the interest rate paths of the Federal Reserve and the BoE will diverge, with the former seen holding rates this week.īritish two-year gilt yields rose as far as 4.847%, their highest since the 2008 financial crisis, surpassing the peak in September under Britain's shortest-serving Prime Minister Liz Truss following her largely unfunded mini-budget. With inflation running above 8% and households and businesses grappling with a cost-of-living crisis, the central bank must contain price growth without triggering a recession. The BoE meets next week to discuss monetary policy. Sterling rose as far as $1.261, its highest since May 11, and was last up 0.72% at $1.26.ĭata from the Office of National Statistics (ONS) showed UK wages in the three months to April grew at their fastest pace on record, excluding during the pandemic, at a clip of 7.2%, after an increase in the national minimum wage. LONDON, June 13 (Reuters) - The pound rose to its highest in over a month on Tuesday as strong wage growth heaped pressure on the Bank of England to keep raising interest rates while the dollar fell after data showed U.S.
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