The British pound advanced Tuesday after People’s Bank of China devalued the yuan to bolter exports, considering the almost 2% devaluation a one-off move.
Sterling ended at 70.85 pence per euro. Against the US dollar, the currency closed at $1.5570.
With faster wage growth, the view for a UK rate hike may be questioned less than the Federal Reserve’s move. “We don’t want to go long sterling/dollar, but we still like euro/sterling shorts,” said Kit Juckes, Currency Strategist at Societe Generale.
Previously, outgoing Bank of England policymaker David Miles said there was a reasonable case to support raising rates in his last policy meeting last week, but he did not find the arguments clear.
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