AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)

LONDON: The British pound edged higher against a faltering US dollar on Monday and was set for its first monthly gain in five as the risk-sensitive currency benefited from improving sentiment.

As markets have readjusted their rate hike expectations from the Federal Reserve lower, the dollar index has weakened over 3.5% from its mid-May peak. This helped lift sterling after it reached its lowest level since March 2020 earlier in the month.

“The rebound in GBPUSD largely reflects USD depreciation,” said Vasileios Gkionakis, EMEA head of CitiFX G10 strategy, who remains bearish on sterling against the euro and commodity FX, citing weakening growth, depleting household savings, absence of meaningful fiscal stimulus and a likely resurfacing of Northern Ireland protocol-related headlines.

The trading range was relatively narrow through Monday as US stock and bond markets were closed for the Memorial Day public holiday, while the British calendar is looking light this week with markets closed on Thursday and Friday for the Spring Bank Holiday and Queen’s Platinum Jubilee.

At 1358 GMT, the pound was up 0.1% against the dollar at $1.2640, just off Friday’s monthly high of $1.26665.

Against the euro, sterling was down 0.2% at 85.15 pence.

Despite sterling’s recent recovery against the dollar, data on Friday released from the Commodity Futures Trading Commission (CFTC) showed investors slightly added to their sterling net short position in the latest week.

The net short position now stands at $6.3 billion, the largest short since 2019.

Analysts are increasingly bearish on sterling given signs of a weakening economy and as the Bank of England continues to raise interest rates in an attempt to bring down inflation.

“Hiking rates against a sharply slowing economy is never a good look for any currency,” Bank of America FX Strategist Kamal Sharma said in a research note.

“An alleviation of the current risk off environment and fiscal stimulus may provide some relief but the damage has been done and the outlook for GBP looks grim,” Sharma added.

Comments

Comments are closed.