Sterling picked up a gear yesterday as the timing of a US interest rate rise was under the spotlight ahead of the annual central bankers’ Jackson Hole meeting.
The pound rose to $1.3226, up 0.2 per cent before the gathering in Wyoming kicks off tomorrow evening. Fed chair Janet Yellen could use her speech on Friday to signal her latest thoughts on the likelihood of a rate rise before the end of the year, though she will also address more structural issues such as the relevance of the central bank’s dual mandate to target both inflation and unemployment.
Futures markets currently put the chances of a US rate rise before the end of the year at 50-50.
Against the euro, sterling was even stronger, bouncing up 0.7 per cent to €1.1757 in a welcome boost for those heading across the Channel for the Bank Holiday weekend.