Pound down on Bank of England comments

Published: 25 Jun at 5 AM Tags: Euro, Dollar,

The British pound is close to its lowest level in a week as the governor of the Bank of England poured cold water on expectations of a an interest rate increase any time before the end of the year. Mark Carney’s comments helped the pound fall to $1.6966. The same time last week the pound was at a five-week high of $1.7064.

Carney has suggested that the markets continue to underestimate the uncertainty in the economy. Economists claim this is creating confusion surrounding the British currency. Both the dollar and the yen aren’t moving much and have been hovering around the 102 yen mark for the past fortnight.

However, some traders expect some movement between the two currencies if the pressure that appears to be building breaks. The yen is currently the popular bet and is likely to remain so, unless the Bank of Japan decides to introduce a monetary easing plan.

The European Central Bank is likely to remain dovish after Germany released data that indicates business sentiment was down during June. There are also concerns over the tensions in Iraq and Ukraine and the impact on business in the eurozone.

The euro is currently trading at $1.3603. Against the yen the single currency remains flat at 138.60.