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Sterling drops off after Carney’s comments

• Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
• September 19, 2017
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Sterling steadied above $1.35 today, recovering some ground following a nearly 1 percent slide after Bank of England governor Mark Carney said interest rates rises in coming months would be limited and gradual.

The pound rose as much as 3.3 percent last week, jumping more than four cents to $1.3618 on the back of hawkish messages from the BoE.

It slid from its highest level since the Brexit result after Carney’s comments on Monday, which some analysts said were aimed at managing market expectations of the pace and number of rates hikes from the UK central bank.

(Carney’s comments) in turn lower expectations with respect to the central bank being close to another rate hike cycle.

If anything, it will depend on incoming data such as Wednesday’s August retail sales to make a case of further currency upside.

While investors will be on alert for retail sales data on Wednesday, the key event for traders this week is a speech in Florence on Friday by Minister Theresa May.

She is expected to discuss the Brexit negotiations, the next round of which have been postponed to the week of Sept. 25. Ratings firm Moody’s will also issue its rating of UK sovereign debt on Friday.