Sterling back above $1.30, close to 8-month high
HOME CONTACT US LOGIN

Sterling back above $1.30, close to 8-month high
* Graphic: Sterling and gilt yields http://bit.ly/2dgAXn1

* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

By Ritvik Carvalho

LONDON, May 19 (Reuters) - Sterling climbed back towards an eight-month high above $1.30 on Friday against a dollar that was weaker across the board, though some investors were calling a top on the British currency, seeing it as vulnerable to Brexit negotiations.

The pound surged to an eight-month high of $1.3048 after strong retail sales figures on Thursday. It then lost momentum later in the day after what some traders called a mini "flash crash", when the currency lost over a cent of its value in less than a minute.

By 1600 GMT on Friday, though, it had recovered to trade up 0.6 percent on the day at $1.3017.

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.

"I would still probably be playing sterling from the short side," said Jeremy Stretch, currency strategist at CIBC World Markets. "Topside is relatively limited from here."

While positioning data shows speculators have reduced record high levels of bets against the pound, reports from major banks this week show big speculative investors and firms still tending to sell the currency whenever it blips higher.

Against a stronger euro, sterling was 0.2 percent down at 85.95 pence.

Investors are betting 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 ruling Conservative Party is 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.

"Now the plan is to delay the balancing of the budget to 2025 from 2022, allowing room for fiscal support should Brexit require it", they wrote in a note to clients.

"Also stepping back from the triple-lock on pensions allows more room for spending on other social programmes and should attract the centre-left vote." (Editing by Gareth Jones)

2017-05-19 18:15:35


© 2017 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.
Most read today
Most read yesterday
Send e-mail to for any enquiries or see Contact Details for phone numbers
Home   •   Terms & conditions   •   PAIA   •   Privacy Policy   •   Security Notice   •   Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa