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 falls from one-month highs as risk currencies' rally cools

ForexOct 21, 2021 16:05
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger/File Photo/File Photo

LONDON (Reuters) - Sterling dipped below one-month highs on Thursday, tracking a similar move in risk-oriented currencies as sentiment weakened across financial markets and traders sought refuge in the safer dollar and yen.

The pound has risen about 3% against the dollar since late September, on the back of expectations of an imminent interest rate hike by the Bank of England.

"BoE tightening expectations have surged, with the first hike now fully priced for the November 4th (BoE) meeting", ING analysts said in a note.

A dip in September inflation is seen unlikely to stop the Bank of England from raising interest rates soon, with many executives warning about fast-rising prices during their third-quarter earnings presentations.

"We expect inflation to be higher next year than this year," Graeme Pitkethly, finance chief at consumer goods giant Unilever (LON:ULVR) told investors on Thursday.

At 1430 GMT, the pound was down 0.06%, at $1.3815 just slightly below a one-month high of $1.3834 reached on Tuesday.

Against the euro, the pound was flat at 84.25 pence.

While there is a strong consensus about the BoE being the first major central bank to raise interest rates in the post-pandemic cycle, a poll of economists by Reuters showed the first hike could come only early next year, later than markets are pricing in.

A batch of disappointing data for economic growth and employment could potentially weaken the pound as it could lead BoE policymakers to a 'wait and see' strategy and delay a decision about interest rates.

Some analysts also believe sterling's ascent in recent weeks has been slowed by post-Brexit trading fears.

On Thursday afternoon, Prime Minister Boris Johnson said the dispute between Britain and the European Union over Northern Irish trade needed to be resolved "pretty fast" because of its impact on people and businesses.

Supply chain bottlenecks, staff shortages and resurgent COVID-19 infections have also dented optimism towards Britain's economic recovery.

Britain's cases could rise to 100,000 a day according to health minister Sajid Javid, while Johnson said no further contingency measures were about to be implemented at this time.

Some positive news came on Thursday morning for the British government which will present its budget forecasts on Oct. 27.

Data showed British public borrowing fell by almost half in the first six months of the current financial year from a post-World War Two high a year earlier, when the economy faced the full force of the pandemic.

Graphic: World FX rates in 2020 http://fingfx.thomsonreuters.com/gfx/rngs/GLOBAL-CURRENCIES-PERFORMANCE/0100301V041/index.html

Graphic: Trade-weighted sterling since Brexit vote http://fingfx.thomsonreuters.com/gfx/rngs/BRITAIN-STERLING/0100310M299/index.html

Sterling falls from one-month highs as risk currencies' rally cools
 

Related Articles

Bitcoin extends downtrend, falls 12.1% to $47,176
Bitcoin extends downtrend, falls 12.1% to $47,176 By Reuters - Dec 04, 2021 5

(Reuters) - Bitcoin dived 12.14% to $47,176.09 on Saturday, losing $6,567.6 from its previous close. Bitcoin, the world's biggest and best-known cryptocurrency, is down 31.6%...

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