FX round-up: Sterling rests ahead of UK CPI, retail sales after rates-driven rises

Andrew Schonberg Sharecast | 17 Mar, 2017 18:36 - Updated: 18:36 | | |

Kent Inglaterra UK dover cliffs

Sterling plugged its way through a Friday session of malaise as transatlantic and European traders took pause after this week's excitement around interest-rate decisions by the central banks of the UK and the US.

But traders are already looking ahead to next week's UK consumer-price index reading of inflation, as well as retail-sales figures for the country, which is expected to kick-start Brexit talks with EU by the end of March.

At 16:58 GMT, sterling was up 0.23% to $1.2389, and up 0.42% to €1.1529. The dollar-spot index was down 0.05% to $100.310.

Sterling went on a Wednesday-Thursday surge after the US Federal Reserve upped its benchmark interest rate, while Bank of England held its, notably on an 8-1 split vote by policy makers.

On Friday its moves were more modest. The British currency slipped a little on the aussie, kiwi, rand and yen, but managed a modest gain against the loonie.

HL Currency Service senior analyst Chris Saint said forex markets were taking a Friday rest after what had been a hectic few days.

"The wider context though is that the sterling/euro rate is still languishing towards the lower end of its 2017 trading range, some distance below the high of €1.19 seen less than a month ago," said Saint.

"Sterling almost got as high as $1.24 versus the US dollar earlier this morning, which is quite a reversal from the eight-week low close to $1.21 seen on Tuesday before the Federal Reserve went on to dampen expectations over how quickly US interest rates might rise."

IG chief market analyst Chris Beauchamp said the upcoming week was likely to be quieter than the one just been.

"UK CPI and retail sales will ensure that sterling remains a focus of attention," he said, adding it looked like "we are in for a period of quiet, at least where events are concerned."

Spreadex financial analyst Connor Campbell styled next week as "one of those dreary post-Fed calendars."

"That meant the UK inflation and retail sales readings -- most pertinent to sterling's current rebound, especially if the former hit 2.0% -- as the main focus for investors."

Meantime, the dollar was mostly lower on key crosses Friday, losing steam against the aussie, kiwi, rand and yen, but pattering a little higher on the euro and loonie.

"Cable is pretty well anchored with expectations still very bearish," said ETX Capital senior market analyst Neil Wilson.

"Article 50 machinations and the prospect of a nasty fight over a second Scottish referendum won't help the mood. It could be a wild ride once (Brexit) negotiations begin."

More news

07:56 Acacia Mining on edge as Tanzania ban on gold exports contiunes

Acacia Mining said there has been no change on the Tanzanian government's ban on exports of gold and copper ore despite lobbying by the company, which is losing more than $1m per day in revenue.

08:43 Smiths Group sales improve as new strategy kicks in

As it makes early progress with a new strategy, engineer Smiths Group reported improved revenues in the second quarter and an unchanged full year outlook.

07:35 LandSec in discussions over new Deutsche Bank HQ, Jones Bootmaker expected to call in administrators

London open

07:33 London pre-open: Stocks seen touch higher on positive Asian cues

London stocks were set for a slightly firmer open on Friday despite a downbeat close on Wall Street, as Asian shares advanced.

07:27 Friday newspaper round-up: Jones, Crest Nicholson, Deutsche Bank

Jones Bootmaker is expected to call in administrators on Friday in a move that will put more than 1,100 jobs at risk. The shoe retailer, which employs 1,145 people, has nearly 100 stores and a handful of concessions in department stores. It is understood to be close to going under after a deal with a private equity firm collapsed. – Guardian

23 Mar US close: Stocks stall as House healthcare vote delayed

US stocks closed marginally lower on Thursday after a House of Representatives vote on President Donald Trump's healthcare plan was delayed.

23 Mar Bonds: Gilts slump on retail sales data as safe haven bid unwinds

These were the movements in the most widely-followed 10-year sovereign bond yields: US: 2.41% (+1bp)UK: 1.23% (+5bp)Germany: 0.43% (+2bp)France: 1.04% (+0bp)Spain: 1.73% (-1bp)Italy: 2.27% (+1bp)Portugal: 4.20% (+4bp)Greece: 7.39% (-1bp)Japan: 0.06% (0bp)

23 Mar US House of Representatives postpones vote on healthcare reform

Leaders of the US House of Representatives put on ice plans for a vote on Thursday night on President Trump's proposal to repeal Obamacare.

23 Mar Directors dealings: Abcam chief shows faith, pulls out chequebook again

Abcam's chief pulled out his wallet for a second time in just under a week to purchase shares in the company he runs.

23 Mar FX round-up: Sterling rises on hearty UK retail sales as inflation, possible BoE rate rise lurk

Sterling ticked higher on most major crosses Thursday thanks to better-than-expected UK retail sales figures for February, with rising inflation and a possible Bank of England (BoE) interest rate hike lurking in the background.