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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