The GBP has increased against a basket of currencies on Friday to continue its gains for a second straight day against the USD, trading above 1.34 USD for the first time in a year as fears of deepening monetary policy diverge between Britain and the US, especially after the probability of increasing the Britain interest has increased early, after the central bank warned that it may raise interest rates for the first time in ten years in the coming months.
At 7:25 GMT GBPUSD has increased to the level 1.3430 from the opening price 1.3394, and record the highest price since September 2016 1.3445 and the lowest price 1.3381.
GBP has increased yesterday by 1.4% against the USD, with the biggest daily gain since 18 of the last April, after the central Britain Bank remarks and decisions at the end of September meeting.
In line with most expectations, the central bank maintained the same monetary stimulus policies with any change mentioned, interest rates stable at its low levels of 0.25% and the asset purchase program at 435 billion GBP.
The bank pointed to the continued recovery of economic activities in the country and warned that it may raise interest rates for the first time in ten years in the coming months as inflationary pressures rise.
The governor of the central bank Mark Carney said that among the members who support the possibility of raising interest rates, he stressed that the acceleration of inflation in the country caused by the main depreciation of the GBP Sterling.
Carney added that the need to raise interest rates has increased in the recent period and that there are already discussions about a slight increase in interest rates, but the decision to raise whether or not will depend on economic data.
This week’s data showed inflation in the country rose above the bank’s target of 2% during August for the seventh month in a row. The bank last month raised its inflation forecast for the year from 2.4% to 2.7%.
European shares have backed down
On Friday at the morning trading European shares have backed down because of the correction and collecting gains, after hitting the highest level in five weeks in the previous session. The London Stock Exchange was the biggest loser after a terrorist incident after the GBP has increased to the highest level in 15 months against the USD.
At 10:50 GMT Dow Jones stock Europe 600 index has backed down by 0.2%, and the index has ended yesterday session with an increase of 0.1%, record the highest level in five weeks, supported by the gains in the energy sector and retail companies.
In London, the FTSE 100 index has decreased by 1.2 %, hitting its lowest level in four weeks, leading the British stock market, the list of the biggest markets in Europe lost in morning trade, after a terrorist incident on a London subway line in the Southwest, and the loss of export companies Domestic impact of the rise of the pound sterling.
Although most European shares fell in the morning, they are on course to achieve the biggest weekly gain since July, because of the strong gains from the banking and insurance sectors, the rise of the energy sector and retail companies.
The contracts of S&P 500 index has backed down by 0.2%, and the index has ended yesterday session with a decreasing by 0.1%, in a first loss during four sessions, because of the recovery process and collecting gains, after the index has recorded at the session its highest levels ever at 2.498.43 points.
At the morning York stock index 50 has backed down by 0.2%, and in German DAX index has decreased by 0.2%, and in France, CAC 40 index has losses by 0.1%.