Pound Appreciates After BoE Pill's Remarks

The pound moved up against its major counterparts in the New York session on Wednesday, as comments from Bank of England Chief Economist Huw Pill cast doubts on a rate cut in August.

Speaking in London, Pill said that although headline annual inflation returned to the 2% target in May, it's not enough to attain the target on a sustainable basis.

"Some work to do before domestic persistent component of inflation is gone."

"I'm reluctant to be drawn on whether I'm cautious or not about cutting rates, important to get balance right," he added.

Investor sentiment improved after Federal Reserve Chair Jerome Powell suggested the case for interest-rate cuts is becoming stronger due to slowing inflation.

The pound advanced to near a 4-week high of 0.8425 against the euro, 4-week high of 1.2846 against the greenback and a 1-1/2-month high of 1.1552 against the franc, off its early lows of 0.8459, 1.2779 and 1.1472, respectively. The next possible resistance for the pound is seen around 0.83 against the euro, 1.31 against the greenback and 1.21 against the franc.

The pound touched 207.79 against the yen, its highest level since August 2008. If the currency rises further, it may find resistance around the 213.00 level.