The pound sterling rose during Thursday’s trading
against major currencies, supported by remarks from Bank of England (BOE)
Governor Mark Carney, which reduced the prospect of an emergency cut in U.K.
interest rates.
As of 09:54 GMT, the British resumed its gains
for a third consecutive session versus the dollar, trading at its highest level
since February 28 at 1.2920.
Not only against the U.S dollar, but also against the
euro, as the pound advanced to 0.8653, while the highest level recorded was at
0.8621.
The pound’s good performance is supported by the
comments by the current and upcoming Central Bank Governors on how the central
bank should deal with the current situation and how to cope with the impact of
Coronavirus on the British economy.
BOE Governor Mark Carney said he would wait for more
clarity on the Coronavirus before deciding on interest rates, rather than
accelerating emergency cuts.
Supporting Carney remarks, Andrew Bailey, the central bank's
next governor, said on Wednesday that the Bank of England would wait until it sees
clearer evidence of economic damage from the Coronavirus before making any
decision to cut interest rates.
Bailey said it is necessary to provide quick
assistance to companies whose operations have been disrupted by the spread of
the virus around the world.
The upcoming Governor told parliament's Treasury
Committee that while the impact of the Coronavirus would be one of his main
priorities, he indicated that a move by the Bank of England was not imminent.
Bailey, who heads the Financial Conduct Authority and
is due to replace current Bank of England Governor Mark Carney on March 16,
said that UK authorities, would need to use other tools to help the economy
overcome the damage to supply chains.
However, a growing number of investors are betting
that the British central bank will follow the suit of the US and Canadian
central banks in lowering interest rates, perhaps before the first scheduled
monetary meeting under Bailey's leadership on March 26.
Meanwhile, the dollar
index, which measures the performance of six major currencies against the US
currency, slumped by 0.32 percent at 96.99.
