The Great Britain pound surged during the past trading week, propelled by interest rate hike speculation. Meanwhile, safe currencies found little demand as risk appetite came to the market.
The Bank of England kept its monetary policy unchanged at this week’s policy meeting as was expected. Yet the central bank still managed to surprise market participants, signaling that an interest rate hike may happen sooner than most speculators were anticipating. Data that showed accelerating inflation supported the case for tighter monetary policy.
Talking about inflation, the faster-than-expected growth of consumer prices in the United States helped the US dollar to rebound. Market analysts were unconvinced that the bounce signal about a trend reversal, though.
The euro continued to be supported by the outlook for monetary tightening from European Central Bank. Meanwhile, safe currencies like the Japanese yen and the Swiss franc did not feel attractive to investors. North Korea continued its missile tests, increasing geopolitical tensions, but it seems that traders got used to such news.
GBP/USD jumped 3.0% during the previous week from 1.3184 to 1.3586 — the highest weekly close since the fateful week of June 2016 when the Britons voted for independence from the European Union. GBP/JPY surged as much as 5.6% from 142.61 to 150.58, and its weekly close was also the highest since June 2016. EUR/GBP slumped 3.6% from 0.9114 to 0.8790 to the lowest since July.
This post was originally published by EarnForex