Pound Extends Rally On U.K. PM's Proposal To Protect EU Citizens In U.K.
June 23 2017 - 2:12AM
RTTF2
The pound extended its early rally against its major
counterparts in early European deals on Friday, after the U.K.
Prime Minister Theresa May unveiled offer to let EU citizens reside
in U.K after the Brexit and the Bank of England's outgoing MPC
member Kristin Forbes saw "some urgency" in tightening monetary
policy.
In Brussels summit, May made a "fair offer" to protect the
future rights of EU citizens, granting a new settled status to
those citizens who had lived in the UK for five years.
Around 3 million EU citizens currently living in the UK would be
allowed to remain and secure rights on healthcare, education and
benefits as per May's proposal.
Speaking to the London School of Business, Forbes said that the
UK economy appears to "overstimulated" and the monetary policy has
been set too loosely.
This is not an economy that is too weak to support an increase
in interest rates. The UK is clearly outperforming or close to
equilibrium by every measure except wage growth, she added.
Survey figures from IHS Markit and Knight Frank showed that
British households perceived that the value of their home increased
in June, albeit at a slower rate than in the previous month.
The Knight Frank/Markit House Price Sentiment Index, or HPSI,
declined to 53.3 in June. Any figure over 50 indicates that prices
are rising.
The currency has been trading in a positive territory in the
Asian session.
The pound climbed to 3-day highs of 1.2744 against the dollar
and 141.89 versus the yen, from Thursday's closing values of 1.2683
and 141.18, respectively. Continuation of the pound's uptrend may
see it challenging resistance around 1.30 against the greenback and
144.00 against the yen.
The pound that closed Thursday's trading at 1.2324 against Swiss
franc climbed to a 2-day high of 1.2367. If the pound-franc pair
extends rise, 1.27 is likely seen as its next resistance level.
The pound firmed to a 3-day high of 0.8766 against the euro,
compared to 0.8792 hit late New York Thursday. The pound is poised
to target 0.86 as the next resistance level.
Flash survey data from IHS Markit showed that the euro area
private sector grew at the slowest pace in five months in June.
The composite output index fell to 55.7 in June from a joint
six-year high of 56.8 in May. The score was forecast to drop
moderately to 56.6.
Looking ahead, Canada CPI and U.S. new home sales for May are
due in the New York session.
At 2:15 pm ET, Federal Reserve Governor Jerome Powell gives a
speech titled "Central Clearing and Liquidity" at the Federal
Reserve Bank of Chicago Symposium on Central Clearing.
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