Pound Hits One-Week High Ahead of Brexit Talks; BoE Cools Negative Rate Fears


© Reuters.  © Reuters.

By Yasin Ebrahim

Investing.com – The pound rallied to a one-week high on Monday as the Bank of England pushed back against the prospect of negative rates, while hopes the UK and EU can reach a deal post-Brexit deal also improved sentiment.

GBP/USD rose 0.90% to $1.2849.

Bank of England deputy governor for markets and banking governor policymaker Dave Ramsden said that while the BoE was "duty bound" to review negative rates as a potential policy tool, it was not expected to cut rates below zero "imminently."

"For me, I see the effective lower bound still at 0.1 which is where Bank Rate is at present," Ramsden said in an interview with Britain’s Society of Professional Economists posted online.

The move helped calm investor jitters the BoE is on a path to cut rates below zero after the bank's monetary policy committee Silvana Tenreyro said there was evidence that negative rates had proved effective.

Sentiment on the pound was also helped by tentative hopes the EU and UK will be able to resolve their differences as both sides are set for a final round of trade talks underway before the EU summit in mid-October.

The United Kingdom continues to reiterate that it is unlikely to budge over key sticking points including fishing policy and the commitment to a "level playing field" in competition.

The U.K. has made it clear it wants to regain control over access to its waters and fish when the Brexit transition period ends, rather than stick with the EU's common fisheries policy, which sets fishing quotas for EU member states.

While the EU has hinted it is willing to compromise on some issues, the economic bloc has reiterated it would not agree to any measures that threaten the four freedoms – goods, people, capital, services – of the single market.

The UK-EU relations has also been further soured by the British prime minister Boris Johnson's move to push through an internal market bill that undermines the Brexit withdrawal agreement.

There might be 'hints' of progress ahead of the European Council meeting on 14-15 October, but it may end up being more posturing before the can gets kicked down the road again for another two weeks a la Brexit tradition, Forexlive said.


Like it? Share with your friends!

What's Your Reaction?

hate hate
0
hate
confused confused
0
confused
fail fail
0
fail
fun fun
0
fun
geeky geeky
0
geeky
love love
0
love
lol lol
0
lol
omg omg
0
omg
win win
0
win
fun

0 Comments

Your email address will not be published. Required fields are marked *

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format