LONDON, June 13 Sterling soared to 1-1/2 year
highs against the euro on Friday while interest rate futures
pointed to the first policy tightening in the UK before the end
of the year after hawkish comments from Bank of England Governor
Carney said on Thursday that interest rates could rise
sooner than financial markets expect, in a surprisingly stark
warning that monetary policy may start to tighten in less than a
The euro fell to 79.87 pence, down 0.22 percent
on the day, and its lowest since November 2012.
The pound was up 0.3 percent at $1.6988, its
highest since May 6 when it hit a high of $1.6997.
Short sterling futures fell across the strip <0#FSS:>
pricing in the first hike by December.
The sterling overnight interbank average curve
(SONIA) was also pointing to a chance of a rate hike by the end
of the year, compared with the first quarter of 2015 on
That is at least six months before the U.S. Federal Reserve
is expected to tighten policy and contrasts with the European
Central Bank, which cut rates last week and is likely to ease
policy in the coming months.
(Reporting by Anirban Nag and Patrick Graham, editing by Nigel