FXStreet (Edinburgh) – Lee Hardman, Currency Analyst at BTMU, sees the sterling appreciating further in the next months while the ‘Old Lady’ could hike early in 2016.
Key Quotes
“The pound has remained stronger following the release yesterday of the firmer than expected UK CPI report for July”.
“The report revealed that the annual rate of core inflation increased by 0.4 percentage point to 1.2% in July”.
“The ONS stated that the main upward contribution came from the base effect of larger discounts for clothes sales last year”.
“At the margin the report provides evidence that domestic cost pressures are rising moving the BoE closer to raising rates”.
“It was a view expressed yesterday by MPC member Miles who stated that the turning point in rates is coming “pretty soon” although they are “not fully there yet”.
“We remain of the view that the pound will continue to outperform alongside the US dollar as the BoE moves closer to raising rates from early next year”.
(Market News Provided by FXstreet)