Yahoo Finance Pound at lowest level since June as Bank of England signals 'top' for interest rates
Holiday goers taking a late summer trip abroad this week may have a nasty surprise when it comes to the ForEx desk, as they will be getting less bang for their buck against major foreign currencies.
The pound has fallen to its lowest level since June, pulling back towards $1.24 against the dollar as markets looked to Bank of England governor Andrew Bailey's comments on a potential peak point for interest rates.
It had slipped 0.3% by the afternoon on Thursday in London. In july it had climbed as high as $1.31.
Bailey told MPs that the UK is likely to be "near the top of the cycle." Interest rates have so far risen for 14 consecutive meetings, hitting 5.25%.
Traders are no longer convinced of a rate rise at the next meeting, which takes place later this month.
"2-year and 10-year gilt yields fell to their lows of the day after his comments to parliament's Treasury Committee," said Neil Wilson, chief market analyst at Finalto. "We know they think they are near the top and hopefully they are – does it suggest much about whether the MPC votes to hike this month? Not really; they’ll make that call on the day and it’s a fine one to call."
Read more: FTSE 100: London Stock Exchange Group investors selling £2bn stake in secondary share offer
Meanwhile, the dollar has strengthened, meaning the pound looks weaker still, and is on track for the longest run of gains since 2005.
Strong services data and lower levels of jobless claims indicated in previous days have propped it up, indicating rates across the pond could stay higher for longer.
The pound also fell slightly against the euro, as traders digested weaker than expected GDP data from the Eurozone.
Watch: Apple stock falls on reports Chinese govt. banning iPhone use for officials
Download the Yahoo Finance app, available for Apple and Android.
