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Pound strengthens as Carney revamps rates pledge
by Chris Marshall on Feb 12, 2014 at 11:54
China’s ‘rock-solid’ trade
It wasn’t just Yellen putting wind in European markets’ sails; an update on Chinese trade, showing growth in both exports and imports, helped counter concerns about the health of the country’s economy.
After a string of poor updates on China’s economy, markets welcomed a report showing exports grew 10.6% year on year in January, up from 4.3% in December. Imports grew by 10% from 8.3% in the previous month.
Though the result was ‘rock-solid’, according to Klaus Baader, economist at Societe Generale, he was among economists cautioning that the timing of China’s Lunar New Year celebrations last week put the accuracy of the report under question. Concerned about the sustainability of the rebound in China’s trade, economists at HSBC described themselves as ‘cautiously optimistic’ over the outlook.
Pound steady as policy change eyed
The British pound was steady at $1.6453 ahead of comments from Bank of England governor Mark Carney this morning in which he is widely expected to tweak his ‘forward guidance’ policy dictating when interest rates will rise.
An unexpectedly rapid decline in UK unemployment to 7.1% means the City expects Carney to backtrack on his plans to consider raising rates when the jobless level hits 7%.
Carney will deliver his verdict in a press conference after the publication of the Bank’s Inflation Report, alongside forecasts for inflation and economic growth.
Mario Draghi, the chief of the European Central Bank, also speaks publically on Wednesday.
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