Pound to US Dollar (GBP/USD) Exchange Rate slipped to two-week low in light trade

The Pound briefly fell to its lowest-level in two-weeks against the US Dollar in a session light on trading.

Sterling fell after Bank of England Governor Mark Carney hinted that the Central Bank may leave interest rates on hold for a longer than expected time due to leeway in the UK economy. Carney was testifying to Parliaments Treasury Select Committee and said that the amount of spare capacity in the UK economy is likely to be higher than 1.5% of the nations GDP, indicating that the economic recovery can continue without the need for a rate hike.

Following his comments the GBP/USD exchange rate fell to a two-week low of 1.6597. It recovered ground later after a report showed that business optimism in the US came in below forecasts last month.

The US Dollar received little support from other data which showed that chain store sales in the country increased by 2.1% year on year, better than the previous reading of a 1.5% rise. Month-on- month sales rose from +0.3% to +1.3%.
Trading has been relatively light today as the market remains jittery following the weekend’s disappointing Chinese economic data and the ongoing situation in Ukraine.

Investors are now looking ahead to Thursday’s US retail sales and jobless claims data for guidance. Consumer sentiment data is also due for publication.

Against the Euro the ‘Greenback’ gained ground after European Central Bank Vice President Vitor Constancio said that the markets had the missed the point of some parts of the Central Bank’s message on forward guidance at last week’s policy meeting.