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Sterling rises after Osborne floats corporate tax cut to 15%
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Yen pauses after best first half since 1995 on haven demand
The pound rose, rallying from its biggest two-week drop in more than seven years after U.K. authorities flagged measures to mitigate the impact on the economy of the vote to leave the European Union.
Sterling strengthened against the dollar for the first time in three sessions Monday after Chancellor of the Exchequer George Osborne floated a lower corporate tax rate in an interview with the Financial Times, and before Bank of England Governor Mark Carney outlines the available macroprudential tools on Tuesday. Chart patterns suggest the U.K. currency is near oversold levels, following its plunge to the lowest level in more than three decades last week.
“The latest measures announced to stimulate the U.K. economy — lower corporate taxes and BOE macroprudential easing — should be viewed by the market as positive and may help the pound partly rebound in the near term,” said Imre Speizer, a market strategist at Westpac Banking Corp. in Auckland. “But ultimately, a lower pound will be required to help rebalance the U.K. economy.”
The pound rose 0.2 percent to $1.3294 at 7:39 a.m. in London, following a two-week, 7.6 percent slide. It was the worst performer in June among 31 major currencies tracked by Bloomberg.
The yen weakened 0.1 percent to 102.65 per dollar, having gained 3.6 percent up to the end of last week since the U.K.’s June 23 referendum spurred demand for the relative safety of Japanese assets. The currency has climbed 17 percent in 2016, its best first halfof a year since 1995, making it the best performer after Brazil’s real among 16 major currencies. The euro was unchanged at $1.1136.
Osborne set a goal of lowering the corporate tax rate to 15 percent in an effort to keep businesses investing in the U.K., bringing it down to a level closer to Ireland’s 12.5 percent. Britain currently has a 20 percent tax rate for business that’s scheduled to fall to 19 percent in April and to 17 percent in 2020.
Carney is set to make his third appearance in 12 days on Tuesday to address the threats facing the financial system. He’ll outline the macroprudential tools available to support the economy, boost business lending and encourage investment — and may ease capital requirements for lenders.
Sterling’s 14-day relative-strength index was at 32, near the 30 level which some traders say is a sign the currency is oversold and poised to reverse direction.
-
Sterling rises after Osborne floats corporate tax cut to 15%
-
Yen pauses after best first half since 1995 on haven demand
The pound rose, rallying from its biggest two-week drop in more than seven years after U.K. authorities flagged measures to mitigate the impact on the economy of the vote to leave the European Union.
Sterling strengthened against the dollar for the first time in three sessions Monday after Chancellor of the Exchequer George Osborne floated a lower corporate tax rate in an interview with the Financial Times, and before Bank of England Governor Mark Carney outlines the available macroprudential tools on Tuesday. Chart patterns suggest the U.K. currency is near oversold levels, following its plunge to the lowest level in more than three decades last week.
“The latest measures announced to stimulate the U.K. economy — lower corporate taxes and BOE macroprudential easing — should be viewed by the market as positive and may help the pound partly rebound in the near term,” said Imre Speizer, a market strategist at Westpac Banking Corp. in Auckland. “But ultimately, a lower pound will be required to help rebalance the U.K. economy.”
The pound rose 0.2 percent to $1.3294 at 7:39 a.m. in London, following a two-week, 7.6 percent slide. It was the worst performer in June among 31 major currencies tracked by Bloomberg.
The yen weakened 0.1 percent to 102.65 per dollar, having gained 3.6 percent up to the end of last week since the U.K.’s June 23 referendum spurred demand for the relative safety of Japanese assets. The currency has climbed 17 percent in 2016, its best first halfof a year since 1995, making it the best performer after Brazil’s real among 16 major currencies. The euro was unchanged at $1.1136.
Osborne set a goal of lowering the corporate tax rate to 15 percent in an effort to keep businesses investing in the U.K., bringing it down to a level closer to Ireland’s 12.5 percent. Britain currently has a 20 percent tax rate for business that’s scheduled to fall to 19 percent in April and to 17 percent in 2020.
Carney is set to make his third appearance in 12 days on Tuesday to address the threats facing the financial system. He’ll outline the macroprudential tools available to support the economy, boost business lending and encourage investment — an
d may ease capital requirements for lenders.
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