LONDON -- The British pound was under pressure Tuesday after Bank of England Governor Mark Carney reined back market expectations that the bank would soon raise interest rates, while oil prices struck 2017 lows on worries over a glut in the market. Elsewhere, markets were fairly flat amid a dearth of market-moving news.
KEEPING SCORE: In Europe, France's CAC 40 was up 0.3 per cent at 5,326 while Germany's DAX rose 0.2 per cent to 12,917. The FTSE 100 index of leading British shares was 0.1 per cent lower at 7,517. U.S. stocks were poised for a flat opening with Dow futures and the broader S&P 500 futures unchanged.
U.K. RATES: In a speech, Mark Carney, the Bank of England governor, sought to dampen down on expectations that interest rates were heading higher after last week's policy meeting saw three-of-eight policymakers surprisingly vote for a quarter point hike in the bank's base rate to 0.5 per cent amid rising inflation. However, Carney said now is "not yet the time to begin that adjustment" in light of uncertainties related to Britain's exit from the EU. Following his comments, the pound was down 0.5 per cent at $1.2672.
ANALYST TAKE: "Rising inflation is clearly a concern among certain policy makers, having risen to 2.9 per cent last month which is well above the central banks 2 per cent target, but Carney was keen to stress that other factors have to be considered," said Craig Erlam, senior market analyst at OANDA.
CRUDE HITS 2017 LOW: Oil prices have fallen sharply amid ongoing signs that production levels remain high and skepticism over the OPEC oil cartel's ability to deliver on its cuts. There will be particular interest in upcoming U.S. production figures. The New York benchmark was down 2.3 per cent at $43.43 a barrel while Brent crude, the international standard in London, fell 2.5 per cent to $45.73.
THE QUOTE: "Unless we see a marked reduction in crude stockpiles, the possibility of further short term falls in the price of oil cannot be ruled out," said Fawad Razaqzada, market analyst at Forex.com
ASIA'S DAY: Japan's benchmark Nikkei 225 added 0.8 per cent to finish at 20,230.41. Australia's S&P/ASX 200 edged down 0.8 per cent to 5,757.30. Hong Kong's Hang Seng fell 0.3 per cent to 25,843.04, while the Shanghai Composite fell 0.1 per cent to 3,140.01.
CURRENCIES: The euro was flat at $1.1157 while the dollar fell 0.1 per cent to 111.40 yen.
