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Bank of England (BOE) Governor Mark Carney maintained his hawkish outlook, pushing pound higher against all of its major trading partners.
- Speaking at a Treasury Committee hearing BOE governor Mr. Carney said that the point at which interest rates may begin to rise is moving closer, given the performance of the economy.
However he also added that while the initiation point is moves closer, there could be shocks which might lead to adjustment.
Pound is simply loving the statement, which moved as high as 1.56 against dollar from 1.548. It is currently trading at 1.558 against dollar and 192.3 against Yen.
If major risk aversion fail to materialize, Yen might lose against pound to as low as 200 from current 192.3, however stop loss for this trade is a bit large around 185. However 189 might also be used as interim support.
Expectations from a rate hike following US Federal Reserve has been building up for quite some time now.
In 9 members MPC committee which decides interest rates for pound, two members (one of which is Martin Weale) are already hawkish. More three is required to give a nod to first hike.
Trade idea -
- We have already suggested going long in Pound against dollar. See "Pound/Dollar trade idea -" at http://www.econotimes.com/Pound-Dollar-trade-idea-%E2%80%93-62475.
- Given the risk reward, one can still long at this price, with target around 1.59-1.595 area. 1.544 area is likely to provide stronger resistance now since bears failed to break it today.
