Sterling heads towards highest since Brexit vote with seasonal bounce
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv
(adds detail, updates prices)
By Tom Finn
LONDON, April 16 (Reuters) - The pound pushed past the $1.43
mark on Monday and approached a post-Brexit referendum high as
investor focus shifted to data that could cement expectations of
a May interest rate increase and away from Britain's military
intervention in Syria.
Britain struck Syria with cruise missiles on Saturday in
partnership with Western allies, targeting chemical weapons
facilities. But the military action did not appear to hurt risk
appetite as bond yields rose and the dollar fell.
Sterling rose by 0.7 percent on Monday to $1.4332,
its highest since January, as the currency continued a two-week
rally against a broadly weak dollar.
Since Britain signed a transition agreement last month to
cover the 21-month period after it leaves the European Union,
concerns about Brexit have abated as investors focus on the
state of the UK economy before an expected rate rise in May.
Crucial data on British unemployment, wages and inflation
numbers are due this week and have the potential to boost
Markets expect the Bank of England to raise interest rates
by 25 basis points next month as it tries to curb inflation.
"With markets almost fully discounting a BoE rate hike, this
week's run of monthly indicators are anticipated to give that
hike a green light," Marc Ostwald, a global strategist at ADM
Investor Services International in London, said in a note.
Yet some investors remain sceptical about expectations for
policy tightening, citing lingering economic uncertainties.
They say it is mainly the broad weakness of the dollar,
linked to a trade dispute between the United States and China,
that is keeping sterling above $1.40.
Traders also pointed to the strong historical performance of
the pound in April, when it tends to rise against the dollar as
foreign companies hand more dividend payments to British
Against the euro, sterling rose 0.2 percent to 86.47 pence
, its highest against the single currency since late
(Reporting by Tom Finn and Tommy Wilkes
Editing by David Goodman)
First Published: 2018-04-16 10:31:21
Updated 2018-04-16 15:56:55
© 2019 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.