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Pound’s highest level in more than a month as dollar falls amid pessimistic Fed

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* Chart: Global forex rates in 2020 http://tmsnrt.rs/2egbfVh

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* Chart: Sterling trade-weighted since the Brexit vote http://tmsnrt.rs/2hwV9Hv

By Ritvik Carvalho

LONDON (Reuters) – The pound hit its highest level in more than a month against the dollar on Thursday, extending gains driven by a drop in coronavirus cases in Britain and downbeat US Federal Reserve pressure on the dollar.

The British currency has risen for five successive sessions, and on Thursday it rose 1.4% against the dollar for the week. By 0754 GMT, the pound rose 0.3 percent on the day at $1.3843, following hitting its highest level since June 24 against the dollar.

The dollar also fell following Federal Reserve Chairman Jerome Powell noted that an interest rate increase was “out of reach”.

Against the broadly stronger euro, the pound rose 0.1% to 85.10 pence per euro.

Although Britain’s COVID-19 infection numbers rose again on Wednesday for the first time in a week compared to the day prior, it was still low week following week and there was little reaction from the pound.

“The pound continues to reap the benefits of the slowdown in Covid-19 cases, which in turn reflects previous market concerns about another meaningful wave,” ING said in a note to clients.

“This means that further adjustment in the speculative position of the sterling on a dip is unlikely. Instead, there is room to rebuild sterling lengthy positions following its massive drop over the former few months.”

Friday’s CFTC data showed that speculators sold sterling for the first time since December 2020 in the week to final Tuesday.

Sterling’s performance has tracked global risk sentiment in recent weeks, as the currency’s performance is in line with the trend of global stock markets. However, the pound rose on Tuesday in an apparently arbitrary move around the daily currency market reform, leaving traders confused.

Traders will look to the Bank of England next week, which appears to be keeping stimulus work running at packed speed despite a burst of two policymakers to suggest that the nearly 900 billion pound ($1.2 trillion) quantitative easing program may have to end beforetime as the acceleration inflation. .

A think-tank said the British government should take on the hundreds of billions of pounds of firm-to-sell bonds held by the Bank of England to decrease the risk of Bank of England independence when the time comes to hoist interest rates. (Reporting by Ritvik Carvalho; Editing by Barbara Lewis)

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Referensi: www.msn.com

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