Pound Appreciates As BoE Broadbent Expresses Optimism Over Economic Growth
The pound firmed against its major counterparts in the European
session on Monday, as Bank of England policymaker Ben Broadbent
remarked that the U.K. is likely to see very rapid growth at least
over the next couple of quarters.
In an interview with the Telegraph over the weekend, Broadbent
said that the U.K. economy will be supported by consumer spending
after the pandemic, although a "roaring twenties" style recovery
cannot be assured.
There has been "less of a disinflationary effect" as households
would spend more after lockdown.
"The price rises for those hitting capacity limits are going to
be bigger than the falls in prices for those seeing falls in
demand", he said.
"The burden of proof it seems to me should be as to why that
wouldn't happen, rather than why it would, so I have tended to be
on that more optimistic side," Broadbent added.
The U.K. vaccination programme has reached another milestone
with over half of the population having had at least one
The country is on course to ease lockdown measures and re-open
the economy due to the progress in vaccinations.
The pound appreciated to 4-day highs of 1.3930 against the
greenback and 150.09 against the yen, off its early lows of 1.3865
and 149.54, respectively. The pound is seen finding resistance
around 1.41 against the greenback and 152.00 against the yen.
The pound bounced off to 0.8683 against the euro, from a 2-month
low of 0.8720 hit at 7:45 pm ET. If the pound rises further, it may
challenge resistance around the 0.84 level.
Survey results from the ifo Institute showed that Germany's
business confidence improved only slightly in April as restrictions
related to the coronavirus pandemic and supply bottlenecks weigh on
The business confidence index rose less-than-expected to 96.8 in
April from 96.6 in the previous month. The score was forecast to
rise to 97.8.
The pound approached 1.2736 against the franc, rising from a low
of 1.2666 seen at 5:00 pm ET. On the upside, 1.30 is possibly seen
as the next resistance level for the pound.
Looking ahead, U.S. durable goods orders for March will be
featured in the New York session.