- Posted by currencies in Bank of England, Bremain, Brexit, Budget, Currency, David Cameron, Dollar, Economy, EUR, GBP, Inflation, Mark Carney, Phillip Hammond, Prime Minister, Referendum, Retail Sales, Sterling, UK, Uncategorised
- May 19, 2017
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Sterling was set for a 1 percent weekly gain versus the dollar today although some investors were calling a top on the British currency, which climbed above $1.30 this week but is seen vulnerable to Brexit negotiations.
The pound surged to an eight-month high of $1.3048 after strong retail sales figures on Thursday, losing momentum later in the day in what some traders called a “flash crash”.
By 0854 GMT on Friday, it had recovered and was up half a percent on the day at $1.3005.
But strategists said the pound — which has gained more than 3 percent in the past month on the announcement of a snap UK election — would find it hard to advance further.
Investors are confident that a widely expected big win for British Prime Minister Theresa May on June 8 will give her more room for manoeuvre in Brexit talks.
Her Conservatives are expected to outspend the opposition Labour Party in campaigning, and many of their traditional business backers are opting to stick with them despite concerns over Brexit.
Besides reiterating that no deal with Europe would be better than a bad deal, May’s election manifesto pushes back the balancing of the UK budget, a factor ING strategists noted might be giving a “modest lift” to sterling.