The British pound held its post-UK election gains on Monday, heartened by the speculation the Bank of England might ignite a change this week in its first hike in interest rates.
The central bank’s monetary policy committee kept rates stable at the record low of 0.5%. Although it issued no statement, BOE Governor Mark Carney is slated to report the quarterly update on its growth and inflation projections Wednesday.
Against the US dollar, sterling added 0.6% to $1.5557. The pound stood at 71.73 pence per euro.
This is the aftermath of the election. Some seem to have been scaling back “for fear of political uncertainty, and now are coming back,” said Josh O’Byrne, Strategist at Citi.
For months, investors have been worries no party would secure an outright majority in last Thursday’s election. That risk dissolved following Prime Minister David Cameron’s Conservatives won.
But political and constitutional challenges remain, with the UK premier pledging to hold a referendum on European Union membership.
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