Latest News

Sterling falls 1% versus dollar, rises against euro

© Reuters. FILE PHOTO: A bank employee counts pound notes at Kasikornbank in Bangkok, Thailand, October 12, 2010. REUTERS/Sukree Sukplang

LONDON (Reuters) – Sterling hit its highest against the euro since July 2016 on Friday, advancing for the fifth consecutive trading day as Russia’s invasion of Ukraine continued to weigh on the single currency.

The pound remains supported as the Bank of England is still expected to hike its interest rate for a third consecutive meeting when it meets this month.

By contrast, expectations for interest rate hikes from the European Central Bank this year have diminished since Russia’s invasion of Ukraine last week, with just 24 basis points worth of tightening priced in by the end of the year.

Before the conflict, markets had been pricing in around 50 basis points of ECB tightening by December.

Against the euro, sterling reached its highest level since July 2016 at 82.61 pence in early London trade before paring some gains.

Sterling dipped 0.3% against a strengthening dollar to $1.3307.

The pound is seen continuing to face headwinds against the dollar, according to Caxton Head of Market Intelligence Michael Brown, given the “poor outlook for risk”.

“Cable has had an incredibly choppy week, trading in daily ranges well over a big figure wide for much of it, though trade hasn’t had much direction to it,” Brown said.

“Despite this, I’d expect the bears to wrestle control before too long,” Brown added.

Sterling advances further against euro on monetary policy divergence

Disclaimer:Fusion Mediawould 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.

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:Latest News