The sterling pound strengthened against the 17-nation currency for the second week after the European Central Bank unexpectedly lowered its benchmark interest rate, which boosted the demand for the UK currency. The pound strengthened to its strongest level since April. Sterling posted its first weekly advance in three weeks versus the dollar as reports showed British services growth unexpectedly accelerated in October to the fastest pace in 16 years and a gauge of house prices jumped to a record. U.K. government bonds declined for a second week as the Bank of England kept its key interest rate at a record low and maintained its bond-buying stimulus target.
According to Lee Hardman, a London-based currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd, the move in the pound is more euro-specific because the downtrend in the euro has accelerated. He added that the data in the UK continues to surprise to the upside, which is supportive for the UK currency.
The pound gained 1.4 percent to 83.52 pence per euro at the close of trading in London on Nov. 8, the biggest advance since the period ended April 26. It touched 83.01 pence on Nov. 7, the strongest level since Jan. 17. Sterling climbed 0.4 percent to $1.5995.
The ECB cut its main refinancing rate to 0.25 percent on Nov. 7 after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable. The Bank of England left its asset-purchase target at 375 billion pounds and the benchmark interest rate at a record-low 0.5 percent on the same day. The London-based central bank has said it will keep the rate low until unemployment, currently at 7.7 percent, falls below 7 percent.
The pound pared its weekly advance against the dollar on Nov. 8 after a U.S. report showed payrolls increased last month more than economists forecast.
A U.K. services industry gauge rose to 62.5 from 60.3 in September, the highest since May 1997, Markit Economics said on Nov. 5 in London. The median estimate in a survey of economists was for a reading of 60. House values in the U.K. increased 0.6 percent from September to an average 237,161 pounds, London-based real-estate researcher Acadametrics and LSL Property Services Plc (LSL) said on Friday Nov. 8.
According to Lee Hardman, a London-based currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd, the move in the pound is more euro-specific because the downtrend in the euro has accelerated. He added that the data in the UK continues to surprise to the upside, which is supportive for the UK currency.
The pound gained 1.4 percent to 83.52 pence per euro at the close of trading in London on Nov. 8, the biggest advance since the period ended April 26. It touched 83.01 pence on Nov. 7, the strongest level since Jan. 17. Sterling climbed 0.4 percent to $1.5995.
The ECB cut its main refinancing rate to 0.25 percent on Nov. 7 after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable. The Bank of England left its asset-purchase target at 375 billion pounds and the benchmark interest rate at a record-low 0.5 percent on the same day. The London-based central bank has said it will keep the rate low until unemployment, currently at 7.7 percent, falls below 7 percent.
The pound pared its weekly advance against the dollar on Nov. 8 after a U.S. report showed payrolls increased last month more than economists forecast.
A U.K. services industry gauge rose to 62.5 from 60.3 in September, the highest since May 1997, Markit Economics said on Nov. 5 in London. The median estimate in a survey of economists was for a reading of 60. House values in the U.K. increased 0.6 percent from September to an average 237,161 pounds, London-based real-estate researcher Acadametrics and LSL Property Services Plc (LSL) said on Friday Nov. 8.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.