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GBP/USD leaps 100+ pips after Carney says a rate hike

GBP/USD flirts with 1.56 after trading  around 1.5460 before these comments hit the wires.

Carney said the time for a rate hike is getting closer. He said this in a testimony in the  Inflation Report Hearings.

This comes after  inflation came out flat, within expectations but certainly not warranting a rate hike, at least not now. I

n the past, Carney made similar bullish hints, most  notably in the Mansion House Speech in June 2014. This sent cable above 1.70 at the time, especially as it came on thin  liquidity around the opening game of the World Cup.

Despite ongoing growth and all such comments, rates are unchanged at 0.50% since 2009 and in recent months, the Monetary Policy Committee voted unanimously for keeping the rates unchanged.

Carney also had interesting comments about Greece. He said that Greece’s debt profile is not sustainable and that execution of the Greek deal will be problematic. He also says there is risk of contagion from Greece. He said that “Herculean efforts” are needed from all sides.

The pound has been  resilient in weathering the dollar storms in recent months, as the Bank of England was seen as raising the rates just after the Fed. However, at times there were doubts this would really happen anytime soon.

Here is how this leap looks on the chart.

Pound dollar jumps on Carney rate comments July 14 2015 technical chart

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.