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Positive economic surprises have supported the currency and triggered a sharp re-pricing of the interest rate outlook, despite Mr Carney's best efforts to keep that in check.
We warn that the credit rating downgrades and a lower rate outlook are important red flags that investors should consider before blindly jumping on the back of a bull.
"The data we've received have shown more buoyancy and resiliency and that's causing a reconsideration of the interest rate outlook," said William Sullivan, economist at Morgan Stanley Dean Witter & Company.
Brokers' notes with titles such as "forward misguidance" or "forward guidance RIP" give the impression of a major change in the interest rate outlook; the first rate rise is pencilled in for early next year, it seems.
Simon Hayes, chief UK economist at Barclays Capital, is also reviewing his rate prediction: "The inflation report should provide further information about the rate outlook, but today's letter implies that the MPC is a little more impatient to raise rates than our current forecast of the first rate hike in November suggests".
Elsewhere in Asia, financial markets were awaiting a speech Monday in Washington by Ben S. Bernanke, the chairman of the U.S. Federal Reserve, for any hints on the U.S. interest rate outlook as Friday's jobs data prompted some speculation that rates could rise sooner than expected.
Similar(37)
And Fitch Ratings has revised the U.S.'s credit rating outlook to negative, warning of a downgrade if a "credible" budget deal is not reached by 2013.
China's foreign-currency debt rating outlook was raised to positive by Fitch Ratings, which forecast that the nation's reserves of overseas currencies would exceed $400 billion this year, second only to Japan.
Two ratings agencies have now downgraded Russia's credit rating outlook to negative from stable.
Last year the UK was given a warning by Fitch when the credit rating outlook was changed to negative, becoming the second ratings agency to put the treasured AAA rating at risk after Moody's made the same move.
Its rating outlook remained negative.
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