Pound Climbs Against Dollar on Dovish Slant in Yellen's Comments
- Fed chair emphasizes need to monitor inflation trajectory
- Sterling earlier dropped as BOE’s Broadbent stays cautious
A collection of British five pound sterling banknotes sit in this arranged photograph in London, U.K., on Thursday, Oct. 13, 2016. The U.K. currency is getting harder to trade, and to predict, because the nation’s exit from the European Union has changed the rules of engagement.
Photographer: Miles Willis/BloombergThe pound climbed for the first time in four days against the dollar as the greenback weakened after Federal Reserve Chair Janet Yellen’s comments on low inflation were interpreted as dovish.
Sterling whipsawed on Wednesday, falling early on after Bank of England Deputy Governor Ben Broadbent said he isn’t ready to support an increase in interest rates, and then paring those losses as U.K. labor data showed earnings increased more than expected. The currency extended its advance after Yellen said that while gradual rate hikes were warranted, there was uncertainty on how inflation will respond to tighter resources.