Sterling nears 3 week high
- Posted by Shyam Gokani in Brexit, Currency, Dollar, Economy, EUR, GBP, Inflation, Retail Sales, Sterling, UK
- August 25, 2016
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Sterling traded close to a three-week high against the dollar today and was on track for its best week in six, with worries over the economic impact of Britain’s vote to leave the European Union easing a little after recent better-than-expected data.
The pound was also on track for its best week in six weeks against the euro, having hit a two-week high against the single currency yesterday.
Data released on Tuesday showed orders for British manufacturing exports hit a two-year peak in August.
The pound continues to trade on a firmer footing, in the near-term supported by the easing of initial Brexit fears as the UK economy appears to be holding up better than expected
Sterling had already risen 1.2 percent last week, after July inflation and retail sales numbers released beat forecasts, adding to signs that consumers have yet to rein in spending after Britain’s vote for Brexit in June.
The central bank cut rates to a record low on Aug. 4 and restarted an asset-buying programme to cushion the economy from an expected post-Brexit slowdown. But after the slew of upbeat data, investors are reassessing the chances of further easing.
“It’s not that bad! That’s the current sentiment for the pound, which provided a strong lift over the past days.
How ever watch out: the Brexit shock is still to come, as its effects will only gradually be reflected in the data, which will worsen over time.
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