The pound pulled away from its early highs against its key counterparts in European deals on Tuesday, after the Bank of England governor Mark Carney indicated that the inflation is expected to rise more gradually and the path towards monetary policy normalisation appears too far.
Due to the oil price collapse, inflation has fallen further and would likely remain very low for longer, the BoE chief said in a speech at Queen Mary University in London.
Carney cautioned that the gloomy global outlook “suggest that the firming in inflationary pressure we had expected will take longer to materialise.”
The pound retreated to 1.4260 against the greenback and 168.19 against the yen, from its prior 4-day highs of 1.4340 and 169.10, respectively.
The pound eased back to 1.4329 against the franc and 0.7624 against the euro, after having advanced to 4-day highs of 1.4444 and 0.7583, respectively.
The next possible support levels for the pound is seen around 1.40 against the greenback, 165.00 against the yen, 1.40 against the franc and 0.78 against the euro.
The material has been provided by InstaForex Company – www.instaforex.com