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Pound Soft Even as Carney Talks About Tightening

August 31, 2015 at 23:31 by Vladimir Vyun

Focus on digits on UK pound notesThe Great Britain pound was very soft against its major rivals on Monday. The currency demonstrated unimpressive performance even though the head of the nation’s central bank confirmed during the weekend that policy makers still plan to tighten monetary policy down the road.

Mark Carney, Bank of England Governor, was speaking in Jackson Hole on Sunday. He said that the troubles of China’s economy will not change the central bank’s stance towards the planned interest rate hike. At the same time, he admitted that the adverse impact of China’s slowdown on the global economy will damp inflation.

Yet the sterling did not profit from the outlook for monetary tightening even though such prospects are extremely positive for the currency. The market sentiment was simply too negative, playing in favor of safer currencies. So happens that the pound is not considered to be one of them.

GBP/USD plunged from 1.5407 to 1.5362 as of 23:30 GMT today. EUR/GBP rallied from 0.7241 to 0.7304. GBP/JPY declined from 187.42 to 186.20.

If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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