The British pound hit a 15-month high against the dollar on Tuesday. This rise was made possible by a weakening dollar and strong UK labor data from the Bank of England (BOE) that prompted markets to expect more rate hikes. Sterling broke the record of recent months by climbing 1.2913 during the day.
How Much Will BOE Raise Interest Rates?
Higher inflation in the island nation than elsewhere, and investors’ expectation that the BOE will raise interest rates more than other central banks, has made the pound the best-performing currency against the dollar in 2023, gaining 6.6% since the beginning of the year. it happened.
Experts expect the BOE to raise interest rates more than the Fed or the European Central Bank. Higher rates mean an advantage for the currency in the short term. However, the long-term economic slowdown is likely to have a negative impact on the British pound.
Data released today showed that British wages continued to rise despite the unemployment rate rising. Economists are worried that rising wages will continue to weigh on inflation.
The general decline in the index also contributed to the rise of the pound against the dollar. The dollar index fell 0.18% today to its lowest level in two months. If the US inflation data, which will be released tomorrow, comes above the expectations, the decline in the dollar may come to an end.
Contrary to our country, the decline in housing prices in the island country draws attention.
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