Sterling advances vs. dollar after Carney's remarks

Sterling rose against the dollar for the second session in a row after Bank of England Governor Mark Carney and his deputy Jon Cunliffe's remarks, and following earlier data from Britain and the US, the world's largest economy. 

As of 05:03 GMT, GBP/USD rose to 1.2935 from the opening of 1.2723, with an intraday low at 1.2717, and the highest since June 19 at 1.2706. 

Earlier UK data showed the Nationwide House Price Index rising beyond expectations in June, while BoE Deputy Governor Cunliff talked about the rising inflation being fueled by the falling value of the pound, which makes the job harder for the central bank, which prefers to wait and make sure of the true improvement in local inflation. 

Cunliff said policymakers are monitoring the developments in exports, and the impact of slowing consumer spending growth closely, while adding the BoE interest rate is a very small part of the banking lending prices, asserting that lending standards shouldn't be affected much by interest rates. 

His comments came after Governor Mark Carney spoke at the European Central Bank Forum on Central Banking, in Portugal, where he talked about the inflation past 2% in Britain as a temporary state, while asserting the BoE is committed to achieve balance in the markets. 

Carney mentioned how consumer spending growth surpassed income levels last year, while expecting policy tightening if current conditions stabilized in the next months, adding that the BoE can't prevent all damages incurring from higher prices on household, while standing ready to take all measures necessary to underpin growth amid uncertainty. 

Carney pointed to the clear gulf between consumer spending and business investments, while saying it's still too early to ascertain how much the economy slowed down, and whether it will continue to slow down or not, adding that the BoE might reverse its current easing measures gradually, while allowing inflation to pass 2% for the time being. 

He finally said the BoE Monetary Policy Committee will discuss the possibility of increasing interest rates in the next few month, and that it will all depend on the disparity between consumption and business investments in the kingdom, while also taking into consideration wages and Brexit negotations. 

Carney held a press conference yesterday, where he talked about the emergency plans for all Brexit scenarios, while mentioning how consumer debt outpaced overall income last year, and asserting that policy decisions bolster the economy in times of uncertainty. 

Carney touched on the risks facing financial stability as Britain exit the European Union, especially for lenders, and adding that monetary policy represent the last line of defense to guarantee stability, and saying that risks originating from China's economic situation are on the top of the global risks facing Britain, while recent British election results didn't change the BoE's plans to contain Brexit risks. 

Otherwise, earlier US data showed the goods trade deficit shrinking more than expected, while wholesale inventories rose past expectations in May, as pending home sales fell unexpectedly last month.