FX round-up: Sterling set to continue gaining, Goldman says
A down-tick in risk appetite prevailed in currency markets on Wednesday, following the previous day’s increase on the back of a more dovish-than-expected speech from Fed chair Janet Yellen.
Dollar/yen slipped 0.04% to 118.83.
For its part, the euro/dollar advanced 0.22% to hit 1.1364.
That came as Yellen, speaking to the US House of Representatives’ Financial Services Committee, reiterated her message from the previous day, telling the assembled Congressmen that the table for Fed rate hikes was ‘flexible’, according to analysts.
Euro/gbp was off 0.24% to 0.732.
Goldman Sachs raised its forecasts for sterling in its cross versus the European single currency, predicting that it would strengthen to 72p, 70p and 68p per euro over the coming three, six and 12 months.
The broker expects the pound to continue advancing as interest rate differentials continue to move in its favour. On Wednesday, cable hit a seven-week high against the US dollar, despite the presumed election uncertainty in the UK.
Further afield, late on Wednesday Ukraine’s central bank lifted a prohibition on foreign-currency trading aimed at stemming the drop in the value of its currency.