By TraderVox.com
Tradervox (Dublin) – There has been very positive reports coming from the UK this week, and the pound has found support to rise to 19-month high against the euro. Minutes from the BOE April meeting showed that Adam Posen has dropped is push for further stimulus supporting the current monetary policy which won 8-1 on the vote.
The UK 24-month yields climbed to the highest in four weeks after the BOE Minutes showed that officials are concerned about inflation as they indicated it might pose a greater problem than they had anticipated. The sterling pound advanced against the 16 most traded currencies as positive reports on jobless claims boosted its demand.
After the release of the Minutes, Neil Jones of Mizuho Corporate Bank Ltd expressed his surprise on Posen’s decision terming it as a reflection of a vision of higher inflation and better growth prospects. The minutes also showed that the inflation target will be kept at 2 percent. Bank of England Deputy Governor indicated that this is as a result of the slow pace of price gains which is less than expected for the year. In a separate report, jobless claims in the March increased by less than expected. The unemployment rate also dropped from 8.4 percent to 8.3 percent according to International Labor Organization.
The reports have pushed the pound to increase by 0.6 percent against the euro to trade at 81.91 pence per euro after it had touched 81.74 which is the strongest it has been since August 2010. The GBP climbed against the greenback by 0.6 percent to trade at $1.6023, which is the highest level it has been since April 3.
The positive sentiments and reports from the UK has pushed the currency above the 1.60 level against the dollar and analysts are projecting that this might continue to happen even through to the next week. The dollar has been weakened by bad reports from the labor market and the NFP report. However, the weakening of the Chinese economy has given the dollar some leverage as traders view it as a safe haven currency.
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