On Wednesday, the British pound moved in uptrend after the leading economist of the Bank of England Andy Haldane said he would have voted to raise the interest rate this year.
During the last meeting of the Bank of England's Monetary Policy Committee, three of its members, including Kristine Forbes, Michael Sanders and Jan McCafferty voted to raise the interest rate by 25 basis points to 0.5%.
In his speech at the National Museum of Science and Media in Bradford, Haldane said that he would soon add his name to this list.
"Having assessed all the data, I believe that over the past six to nine months, the balance of risks associated with too rapid tightening of monetary policy on the one hand and a too long pause before the interest rate increase on the other has shifted towards the latter," Haldane explained.
"Obviously, I believe that an increase in monetary policy is likely to take place well ahead of market expectations," he added.
Haldane noted that he was considering the possibility of raising the interest rate at the June meeting of the Monetary Policy Committee, but he resisted this decision because he saw few signals to raise wages and was concerned about the probability of a stronger than forecasted slowdown in the economy.
After these statements, GBP/USD sharply rose, recouping from a daily low at 1.2590 and reaching a session high at 1.2700.
The pound also gained 0.35% against the yen, while the EUR/GBP fell 0.41%.
The US dollar fell against other major currencies on Wednesday amid a low volume of trading. Investors are waiting for the publication of data on the construction sector of the US economy on the day after new comments by Fed officials have led to uncertainty about the future rate hike.
EUR/USD rose 0.09% to 1.1144.
The dollar received support after on Monday the president of the Federal Reserve Bank of New York, William Dudley, made a number of statements in support of tightening monetary policy, increasing the likelihood that the Fed will continue to raise the interest rate.
However, afterwards, the president of the Federal Reserve Bank of Chicago, Charles Evans, spoke in favor of a softer monetary policy. He believes that it would be more sensible for the US central bank to wait until the end of the year before making a decision on a new increase in the interest rate.