AGL 38.15 Increased By ▲ 0.90 (2.42%)
AIRLINK 121.51 Decreased By ▼ -2.51 (-2.02%)
BOP 5.85 Increased By ▲ 0.23 (4.09%)
CNERGY 3.75 Increased By ▲ 0.03 (0.81%)
DCL 8.40 Increased By ▲ 0.15 (1.82%)
DFML 40.89 Increased By ▲ 0.62 (1.54%)
DGKC 84.60 Decreased By ▼ -1.14 (-1.33%)
FCCL 32.70 Increased By ▲ 0.10 (0.31%)
FFBL 65.50 Decreased By ▼ -1.00 (-1.5%)
FFL 10.05 Decreased By ▼ -0.11 (-1.08%)
HUBC 103.80 Increased By ▲ 0.70 (0.68%)
HUMNL 13.25 Decreased By ▼ -0.15 (-1.12%)
KEL 4.43 Increased By ▲ 0.18 (4.24%)
KOSM 7.09 Decreased By ▼ -0.09 (-1.25%)
MLCF 37.50 Decreased By ▼ -0.80 (-2.09%)
NBP 60.25 Decreased By ▼ -4.76 (-7.32%)
OGDC 172.25 Decreased By ▼ -1.55 (-0.89%)
PAEL 24.80 Decreased By ▼ -0.10 (-0.4%)
PIBTL 5.70 Decreased By ▼ -0.10 (-1.72%)
PPL 141.69 Decreased By ▼ -1.01 (-0.71%)
PRL 22.72 Decreased By ▼ -0.26 (-1.13%)
PTC 14.74 Decreased By ▼ -0.37 (-2.45%)
SEARL 64.56 Decreased By ▼ -0.79 (-1.21%)
TELE 7.14 Increased By ▲ 0.14 (2%)
TOMCL 35.50 Decreased By ▼ -1.41 (-3.82%)
TPLP 7.29 Decreased By ▼ -0.05 (-0.68%)
TREET 14.20 Decreased By ▼ -0.08 (-0.56%)
TRG 51.75 Increased By ▲ 2.05 (4.12%)
UNITY 26.60 Increased By ▲ 0.45 (1.72%)
WTL 1.22 Decreased By ▼ -0.02 (-1.61%)
BR100 9,483 Decreased By -118.3 (-1.23%)
BR30 28,371 Decreased By -202.1 (-0.71%)
KSE100 88,967 Decreased By -1319.8 (-1.46%)
KSE30 27,827 Decreased By -515.9 (-1.82%)

Sterling extended gains above $1.70 to hit a 5-1/2 year high against the dollar on Thursday, bolstered by the diverging monetary policy outlooks between the Bank of England and the US Federal Reserve. Britain's pound was also helped by robust data. A measure from the Confederation of British Industry showed factory orders grew at their fastest pace in six months in June, far outstripping expectations.
The yield gap between two-year British gilts and US Treasuries widened, prompting more investors to buy sterling. While the Federal Reserve signalled on Wednesday that rising inflation won't trigger an increase in US interest rates any time soon, investors are pricing in the chance of a rate hike in Britain before the end of the year. Sterling rose to $1.7052, up 0.3 percent on the day. The pound also rose against the euro, with the single currency down slightly at 79.96 pence. The currency barely reacted to monthly UK retail sales data for May which showed a fall for the first time since January.
On a year-on-year basis, retail sales were slightly below forecasts but that did little to alter rate hike expectations. "These slightly worse-than-expected figures shouldn't affect the optimistic outlook for the UK economy as there was always going to be a slight drop given the unexpectedly high April reading," said Jake Trask, corporate dealer at UKForex.
Sterling has gained more than 10 percent in the past year on expectations a rapidly improving UK economy would prompt the BoE to raise rates before its peers in Europe and the United States. The rally had stalled in the past month after Governor Mark Carney warned markets in mid-May not to expect swift action.

Copyright Reuters, 2014

Comments

Comments are closed.