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Sterling holds near five-month peak, set for fourth week of gains

Forex Dec 02, 2022 11:22
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© Reuters. FILE PHOTO: A bank employee counts pound notes at Kasikornbank in Bangkok, Thailand October 12, 2010. REUTERS/Sukree Sukplang/File Photo
 
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LONDON (Reuters) - The pound was set for a fourth straight week of gains, holding steady against the dollar at near five-month high it hit in the previous session as hopes of the United States nearing the end of its rate-hike cycle weighed on the greenback.

Sterling was last trading at $1.22675 unchanged against the dollar on Friday, but was set for a weekly gain of 1.5%.

It hit $1.231 on Thursday its highest since June 27, though the move was primarily dollar driven with the euro also touching a similar milestone.

Cable - sterling/dollar - in recent weeks has largely traded in line with the moves of other G10 currencies against the dollar, a change from September and October when it struggled more than others and fell as low as $1.0372 after a budget announcement by Britain's then finance minister Kwasi Kwarteng.

"We are modestly bullish on sterling and part of that is related to the dollar narrative," said Kristoffer Kjær Lomholt, head of FX, corporate research and chief analyst at Danske Bank.

"The current account funding story that played out with the "mini-budget" and the uncertainty around that has been completely priced out, we see that both in real sterling terms and also real rates terms. All that has fully reversed from late September, early October."

{{2126|The dodollar index, which tracks the greenback against a basket of currencies, fell by 5% in November, its most since 2010.

The currency has been weakening as traders position on expectations of a pivot towards slower pace of rate increases by the United States.

These expectations were underpinned by a dovish speech from Federal Reserve chair Jerome Powell on Wednesday as well as U.S. data on Thursday that raised concerns about slowing economic growth while indicating a slowdown in inflation.

U.S. jobs data due later in the day will provide more clues about the Fed's rate hiking cycle.

The pound was also at the firmer end of its recent range against the euro, with one euro worth 85.8 pence.

 

 

Sterling holds near five-month peak, set for fourth week of gains
 

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Md Moshu
Md Moshu Dec 02, 2022 13:18
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