LONDON: Sterling gained versus the euro on Monday as traders continue to bet on a rapid pace of interest rate rises from the Bank of England. Investors will also be listening closely for any clues on that pace when BoE Governor Andrew Bailey and his deputy speak later on Monday.
Against the euro, by 0800 GMT sterling was 0.3% higher at 84.02 pence, near a one-week high and off the three-months lows of 85.12 pence touched on Thursday.
Versus the dollar the pound rose 0.1% to $1.3125, keeping it firmly within a tight trading range it has been in since mid-February. “Despite much focus on the heaviest cost of living rise since British records began (1950s), the market still prices the BoE Bank Rate at 2.20% at the December meeting later this year.
That pricing of the BoE cycle is likely keeping GBP relatively well bid, although we do think the risks are growing of Cable breaking down to the $1.25/28 area over coming months,“ ING analysts wrote in a research note sent to clients.
Bailey is scheduled to speak at a conference at 1005 GMT and his deputy Jon Cunliffe will address a fintech conference at 1400 GMT.
Sterling slips as manufacturing growth falls to 13-month low
This week is light on important UK economic data, and markets will be very much focused on any talk about rate rises, as well as how financial market and risk sentiment hold up amid the war in Ukraine. Money markets are currently pricing in a 25 basis point hike when the BoE meets in May.
Interest rates are currently at 0.75%.
Comments
Comments are closed.