Pound moves above $1.61 as Carney says no case for more QE
Bank of England governor Mark Carney has said there's no case for more quantitative easing, in an interview with the Yorkshire Post today.
But my personal view is, given the recovery has strengthened and broadened, I don’t see a case for quantitative easing and I have not supported it.
That's provided support for the pound, which rose sharply against the dollar on the news. For a brief period it broke above $1.61.
Societe Generale's Kit Juckes says that Carney's interivew "expresses optimism about the broadening economic recovery" but notes that "nobody on the MPC voted for [more quantitative easing] last time around".
There’s little to add other than to say that this helps GBP (buy GBP/CHF and GBP/JPY) and reinforces a sense that the MPC could hike before Fed, ECB or BOJ. Sell 10year Gilts vs US, receive 2yr1yr Euros vs GBP.
Providing some continuity from his predecessor Sir Mervyn King, Carney (diplomatically) dropped a few lines about sport into his interview with the Liverpool Echo:
Mr Carney said he had been an Everton fan since the 1980s, saying: “I have cousins in Formby and Crosby and who are avid and rabid Evertonians.”
He snuck into Upton Park last Saturday to see them come from behind to beat West Ham 3-2 in a “spectacular come-from-behind victory”.
But he smiled: “Equally, as Governor of the Bank of England, I fully recognise the contribution of all the great football clubs in Merseyside and of all the great footballers that come out of Merseyside.”