{"id":3926,"date":"2017-09-19T00:00:00","date_gmt":"2017-09-19T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100146-gbp-usd-boe-comments-drop-gbp\/"},"modified":"2017-09-19T00:00:00","modified_gmt":"2017-09-19T04:00:00","slug":"100146-gbp-usd-boe-comments-drop-gbp","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100146-gbp-usd-boe-comments-drop-gbp\/","title":{"rendered":"Pound Reverses Recent Gains Over Dollar After BoE Governor Disappoints"},"content":{"rendered":"<p>The pound has shed almost 200 points since its one year high of US$1.3619 reached early on Monday. The sterling rally, which started last week, has quickly lost momentum. Furthermore, disappointing comments by Bank of England (BoE) Governor Mark Carney ensured the pound remained out of favour as the day wore on. The pound finished lower on Monday at US$1.3496.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\n<p> When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute. <\/p>\n<p> For example, it could be written: <em>1 GBP = 1.28934 USD<\/em> <\/p>\n<p> <em>Here, \u00a31 is equivalent to approximately $1.29. This specifically measures the pound\u2019s worth against the dollar. If the US dollar amount increases in this pairing, it\u2019s positive for the pound.<\/em> <\/p>\n<p> Or, if you were looking at it the other way around: <em>1 USD = 0.77786 GBP<\/em> <\/p>\n<p> <em>In this example, $1 is equivalent to approximately \u00a30.78. This measures the US dollar\u2019s worth versus the British pound. If the sterling number gets larger, it\u2019s good news for the dollar.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>Investors focused on BoE governor speech before the IMF in Washington. The UK central bank had said last week that it would be looking to withdraw stimulus in the coming months should UK economic data not suddenly take a turn for the worse. Therefore, investors were keen to hear what more BoE Governor Carney had to offer on the subject. However, markets were disappointed by his comment warning that interest rate rises would be limited and gradual. As a result, the pound tumbled lower.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why do raised interest rates boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Higher interest rate environments tend to offer higher yields. So, if the interest rate or at least the interest rate expectation of a country is relatively higher compared to another, then it attracts more foreign capital investment. Large corporations and investors need local currency to invest. More local currency used then boosts the demand of that currency, pushing the value higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>The UK economic calendar is light this week. However, Brexit will be back in the limelight as UK Prime Minister Theresa May is set to take to the stage in Florence on Friday to set out her vision of Brexit. Theresa May isn\u2019t going for the hard Brexit of her colleague, UK Foreign Secretary Boris Johnson. Instead, she seems to be favouring a more smooth, transitional Brexit.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why is a smooth Brexit good for the pound? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>A smoother Brexit would be a scenario in which the economic consequences of leaving the European Union are minimised. This is favourable for the pound because the less the Brexit impact on the economy, the more likely that foreign investors will remain interested in the UK. Foreign investors need sterling to invest in the country and so the more GBP is purchased, the higher the demand and, thus, an increase in the currency\u2019s value. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>A smooth Brexit should be more business friendly. However, it could come with a hefty price tag. There are suggestions that Theresa May will offer \u00a330 billion for the divorce bill in order to kick start stagnating Brexit negotiations. Brexit woes are likely to weigh on sentiment for the pound as the week progresses.<\/p>\n<h2><a href=\"#us-federal-reserve-meeting-comes-into-view\" name=\"us-federal-reserve-meeting-comes-into-view\"><\/a>US Federal Reserve meeting comes into view<\/h2>\n<p>The US dollar is edging higher on general positive sentiment. There\u2019s no specific data which has caused the buck to increase in value, although investors are pleased that tensions are once again cooling between North Korea and the US.<\/p>\n<p>Today is set to be another quiet day as investors await the US Federal Reserve meeting on Wednesday. No interest rate rise is expected from the US, however, dollar traders will be listening hard for any details on plans for US balance sheet reduction. Although this is considered a form of monetary policy tightening, analysts are unsure how the market will respond to the news. This is mainly due to the fact that balance sheet normalization on this size has never happened before.<\/p>\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td>\n<p><small><em><br \/>\nThis publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Inc., Currency Live or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. Consult our <a href=\"https:\/\/currencylive.com\/risk-warning\/\">risk warning<\/a> page for more details.<\/em><\/small><\/p>\n<p><small><em>This article was initially published on TransferWise.com from the same author. The content at Currency Live is the sole opinion of the authors and in no way reflects the views of TransferWise Inc.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The pound has shed almost 200 points since its one year high of US$1.3619 reached early on Monday. The sterling rally, which started last week, has quickly lost momentum. Furthermore, disappointing comments by Bank of England (BoE) Governor Mark Carney ensured the pound remained out of favour as the day wore on. The pound finished [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3927,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1394,1398],"class_list":{"0":"post-3926","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-gbp","8":"category-usd","9":"tag-gbp","10":"tag-usd"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Pound Reverses Recent Gains Over Dollar After BoE Governor Disappoints - Currency Live<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/currencylive.com\/news\/100146-gbp-usd-boe-comments-drop-gbp\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Fiona Cincotta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100146-gbp-usd-boe-comments-drop-gbp\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100146-gbp-usd-boe-comments-drop-gbp\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Pound Reverses Recent Gains Over Dollar After BoE Governor Disappoints\",\"datePublished\":\"2017-09-19T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100146-gbp-usd-boe-comments-drop-gbp\\\/\"},\"wordCount\":859,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100146-gbp-usd-boe-comments-drop-gbp\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100146-gbp-usd-boe-comments-drop-gbp.jpg\",\"keywords\":[\"gbp\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2017\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100146-gbp-usd-boe-comments-drop-gbp\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100146-gbp-usd-boe-comments-drop-gbp\\\/\",\"name\":\"Pound Reverses Recent Gains Over Dollar After BoE Governor Disappoints - 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