The British pound have moved higher today against the major currencies as one of the Uk’s top policy maker said that it was time to raise interest rates
Just days after the Bank of England kept rates on hold and provided a neutral stance in the following monetary statement, Bank of England policymaker Kirstin Forbes broke with ranks today and said that the local economy was ready for a rate hike,
“Although she is widely viewed as one of the most hawkish members of the central bank and her views diverge with Governor Carney's cautious outlook, they were enough to turn the pound around, driving sterling sharply higher against all of the major currencies," noted Kathy Lien, Director at BK Asset Management in New York.
According to one analyst, there is a currency war going on around the globe at the moment which includes the pound, says Joachim Fels, global economic adviser at Pimco’s.
He noted that the Fed, “in its post-FOMC meeting statement on Wednesday, refrained from trying to push the already low March rate hike expectations higher through more hawkish language,” which in turn pushed the US dollar lower.
He also added that exporting countries such as China, Japan and Europe are in on the game but they better be careful not to go to far,
"The rational response by Europe, Japan, China and other exporters would be to not overdo the cold currency war and, at least temporarily, allow some appreciation of their currencies versus the Dollar in order not to provoke the U.S. further," says Fels.
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