Sunday, August 17, 2014

BoE Governor Mark Carney speaks, again | Sterling gapped up this AM in early trading


According to an interview with him published in the Sunday Times yesterday, Mark Carney, governor of the Bank of England, is now talking about the possibility of a rise in the UK interest rates “before real wages turn positive”.

Mr Carney caused a jump in Sterling exchange rates recently when, at an official function in London’s Mansion House, he stated that base interest rates might rise quicker than the market expected. However, following that occasion the rally fizzled out, partly in the face of a slowdown in market volatility, which was exacerbated by the Summer holiday season. This has yet to lift. Will the end of the vacation period provide us with the market action that will give the rise to the GBPUSD pair (Cable)?

Sterling gapped up this AM


At the open of the Asian session this morning, Sterling did indeed show a gap up on early trading. It is perhaps too early yet to read too much into this, but the pair does warrant keen monitoring.

An increase in market volatility, the lack of which has inhibited Forex trading of late, will be key to the answer to the question of whether or not Sterling is, once again, on the rise. Or will the market take the view that Mr. Carney is playing the part of the Little Boy Who Cried Wolf?

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