Pound’s strong run continues with push above $1.43

0

The pulse has continued its recent strong run against the dollar pushing firmly out of reach of $1.43.

It is the seventh session in a row that the pound has made gains against the US currency.

The vigorous run means that, among the G10 group of rich nations, the UK has the best-performing currency this year.

Wholesalers say the prospect of higher UK interest rates has made the pound more winning while the dollar has been hit by fears of trade disputes.

The pound started the week with a outdistance of almost a cent to $1.4323, while against the euro it was 0.2% spaced out at €1.1569.

Following the vote to leave the European Union in June 2016 the confine sank, hitting $1.2068 in January of last year.

Since then it has purloined a comeback.

Jane Foley, a currency strategist at Rabobank, said the new strong run can be dated back to September 2017 when it became clear the Bank of England was keen to raise interest rates.

In November, the Bank increased the cost of adopting for the first time in a decade — from 0.25% to 0.5%.

And in February the pound’s impulse was maintained when the Bank hinted at an accelerated pace of interest appraise increases.

Most analysts expect it to raise interest rates again in May.

According to Ms Foley, any portent about what happens to interest rates after that is the key to the confine’s next move.

Some clues may come from some high-level economic data this week.

On Tuesday the latest UK unemployment and wage evidence is released and Wednesday brings the latest inflation figures.

Data keep an eye on

Ms Foley said Tuesday’s data on earnings growth should be the «most attractive», as weak wage growth has been one reason why the Bank of England has been obtuse to raise rates.

If the data remains weak then the Bank may not be sorry for pressure to make another rate increase after May, she said.

Another big banker governing the pound’s progress is the progress of Brexit talks. Trade understandings start again this week and will be closely monitored.

If those talks go severely then the pound could be undermined.

Leave a Reply

Your email address will not be published. Required fields are marked *