Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Sterling set for biggest weekly jump in five months

EconomyOct 15, 2021 16:31
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: British five pound banknotes are seen in this picture illustration taken November 14, 2017. REUTERS/ Benoit Tessier/Illustration/File Photo

By Elizabeth Howcroft

LONDON (Reuters) -Sterling rose on Friday and was set for its biggest weekly gain against both the dollar and the euro since May, boosted by a combination of dollar weakness and expectations that the Bank of England will raise rates this year.

The dollar was heading for a weekly decline and the Japanese yen sunk to a three-year low, as global risk appetite rebounded.

At 1515 GMT, the pound was up 0.6% against the dollar at $1.3759, having hit its highest in a month and on track for its biggest weekly gain since May.

It was also up around 0.6% versus the euro, having touched its strongest level since February 2020 at 84.275 pence per euro.

Against the yen, the pound rose to its highest since 2016.

Simon Harvey, senior FX analyst at Monex Europe, said that the move in sterling was prompted by dollar weakness and investors covering their dollar short positions.

Expectations that the Bank of England will raise rates this year have also been cited by some analysts as a factor supporting the pound.

The pound jumped against the dollar on Monday after BoE Governor Andrew Bailey stressed the need to prevent inflation from becoming permanently embedded and fellow policymaker Michael Saunders said households must brace for "significantly earlier" interest rate rises.

But on Thursday, two other policymakers - Catherine Mann and Silvana Tenreyro - made more dovish remarks, pushing back against the idea of raising rates.

ING FX strategists said that the dovish comments did not significantly affect the market's expectations for a rate rise.

"Looking beyond today's price action, we still think sterling may have to give up some of its recent gains as our economist expects the BoE to underdeliver on monetary tightening," ING said in a client note.

ING also said that the pound was "complacent" in the face of new Brexit-related frictions between the UK and the European Union.

UK Prime Minister Boris Johnson signed up to the "Northern Ireland protocol" as part of his Brexit agreement in 2020 but has since argued it was agreed in haste and was no longer working for the people of Northern Ireland.

On Wednesday, the EU offered Britain a package of measures to ease the transit of goods to the province, but British Brexit Minister David Frost said that the proposals were not enough.

"This EU proposal appears to have removed the near-term prospect of an escalation that could have fuelled imminent selling of the pound in the markets," wrote MUFG head of research Derek Halpenny in a client note.

"We doubt the pound will get much lift from this latest Brexit issue until there is a sense of progress in the negotiations over the coming weeks."

Sterling set for biggest weekly jump in five months
 

Related Articles

Bitcoin falls 9.2% to $48,782
Bitcoin falls 9.2% to $48,782 By Reuters - Dec 04, 2021

(Reuters) - Bitcoin dropped 9.29% to $48,752.15 at 22:01 GMT on Saturday, losing $4,991.54 from its previous close. Bitcoin, the world's biggest and best-known cryptocurrency, is...

Bitcoin tumbles 5.5% to $53,436
Bitcoin tumbles 5.5% to $53,436 By Reuters - Dec 03, 2021

(Reuters) - Bitcoin plunged 5.5% to $53,435.9 at 22:04 GMT on Friday, losing $3,112.06 from its previous close. Bitcoin, the world's biggest and best-known cryptocurrency, is...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email