The British pound has jumped in the American session today after US Federal Reserve President Janet Yellen reaffirmed that the central bank would move cautiously with interest rate hikes.
At 8.23pm (GMT) the Pound was trading at $US1.4388c up 0.93 percent from yesterday’s trading.
Speaking to the economic club of New York, Yellen noted that inflation remains subdued in the world’s biggest economy, which may see the oil price take a tumble in the nearest future which will add more pressure to inflation,
"The inflation outlook has also become somewhat more uncertain since the turn of the year, in part for reasons related to risks to the outlook for economic growth," she said.
"To the extent that recent financial market turbulence signals an increased chance of a further slowing of growth abroad, oil prices could resume falling, and the dollar could start rising again." she added.
After President Yellen’s speech the market is now pricing in only a 7 percent chance that the Fed will raise rates in April and a 50 percent chance that the will be a hike before the end of the year.
The Fed president still remains an outsider in the Fed’s quest to hike interest rates with a majority of members opting for a move sooner rather than later.