Pound Weakens As BoE Bailey Signals Peak In Interest Rates

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Pound Weakens As BoE Bailey Signals Peak In Interest Rates

(RTTNews) - The pound fell against its major counterparts during European deals on Thursday, as comments from Bank of England Governor Andrew Bailey suggested that the central bank was close to the end of its rate hike cycle.

Speaking to Parliament's Treasury Committee on Wednesday, Bailey said the BoE is "much nearer now to the top of the cycle" and predicted a significant decrease in inflation this year.

"The fall in inflation will continue... and I think will be quite marked by the end of this year."

Bailey's comments have raised doubts about the likelihood of a November rate increase following the move later this month.

UK house prices declined at the fastest pace in nine months in August as rising mortgage rates and high inflation continue to weigh on housing affordability and demand.

House prices registered a monthly drop of 1.9 percent, following a 0.4 percent drop in July. This was the biggest fall since November 2022 and also marked the fifth consecutive decrease.

The year-on-year fall in house prices was 4.6 percent, which was also bigger than the 2.5 percent drop in July. The 4.6 percent decrease was the largest fall since 2009.

The pound touched 0.8601 against the euro and 1.1109 against the franc, setting 8-day lows. The pound is seen finding support around 0.87 against the euro and 1.10 against the franc.

The pound declined to a 6-day low of 183.57 against the yen and near a 3-month low of 1.2450 against the greenback, from its early highs of 184.76 and 1.2508, respectively. The pound may locate support around 180.00 against the yen and 1.22 against the greenback.

Looking ahead, U.S. weekly jobless claims for the week ended September 2 and Canada Ivey PMI for August are set for release in the New York session.

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