Sterling slipped against a broadly firmer dollar on Monday but held steady on the euro as investors consolidated their position at the start of the week which will see a Bank of England interest rate decision. Sterling hit a four-week high on the trade-weighted index last week, aided by some encouraging data and buying against the lower-yielding yen. The BoE is expected to leave interest rates at 4.75 percent for the eighth month running when it announces its decision on Thursday.
Such expectation was cemented after signs that British consumer are spending more cautiously. A Reuters poll of 47 economists showed on Monday the odds still favour another British interest rate rise this year.
By 1400 GMT sterling was down a third of a percent on the day at $1.8735. Against the euro it was steady at 68.57 pence after hitting an eight-week high of 68.46 on Friday.
On the trade-weighted index the pound dropped slightly. The dollar was broadly firmer as investors bet higher interest rates would continue to support the US currency.
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