Sterling slightly gains
- Posted by Shyam Gokani in Uncategorised
- October 12, 2016
- No Comments
The recently buoyant dollar came under pressure in Asian trading on last night, as sterling partially rebounded from its dramatic losses in the previous session.
The pound was up 1.5 percent at $1.2301, after tumbling as low as $1.2086 on Tuesday, heading towards a 31-year low of $1.1450 hit on Friday as investors feared the impact on Britain from leaving the European Union.
Sterling benefited from a report that British Prime Minister Theresa May has accepted that Parliament should be allowed to vote on her Brexit plan.
May will accept voting at the Parliament, which is giving the pound a short-term boost, but I’m not sure it’s long-lasting.
Its latest fall was too much and too rapid, so it’s natural to see some rebound. It seems the dollar’s weakness against sterling today is affecting the other dollar currency pairs as well, which is also natural.
The dollar had been on an upswing due to rising expectations that the U.S. Federal Reserve would raise interest rates as early as this year, with markets pricing in around a 70 percent chance of a hike in December.
The dollar has also benefited as Democratic presidential nominee Hillary Clinton widened her lead in opinion polls over Republican rival Donald Trump.
Investors awaited the minutes of the Federal Reserve Open Market Committee’s September meeting, scheduled to be released later on today, as well as U.S. retail sales data on Friday, for clues as to how close the U.S. central bank is coming to hiking interest rates.
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