FX round-up: Perky pound takes cheeky Friday stroll higher on dollar

Digital Look Sharecast | 19 May, 2017 18:49 | | |

Money coins pound

Britain's perky pound went for a cheeky Friday stroll over the psychologically important $1.30 marker thanks to the lingering political storm surround US President Donald Trump.

At about 17:00, sterling was up 0.6% to $1.3016, and was down 0.21% to €1.1633. The dollar-spot index was down 0.62% to $97.269.

"The GBP/USD was boosted by the impressive UK Confederation of British Industry industrial order expectations report," said David Madden, market analyst at CMC Markets UK.

The CBI report came in with a reading of 9 for May, a clear rise from April's 4 and well above forecasts for a print of 4. This was after Thursday's better than expected UK retail data.

FXTM's Lukman Otunuga said that, from a technical standpoint, the cable still remained at risk of trading lower to $1.2775 if bulls failed to secure a solid daily close above $1.3000.

"In an alternative scenario, a daily close above $1.3000 should open a path higher towards $1.3250," said the research analyst.

Sterling was also up on the aussie, loonie, kiwi and yen, but slipped on the rand and euro.

"The EUR/USD also had a positive session today on account of the decline in the US dollar," said Madden.

"Higher than expected producer price index (PPI) numbers from Germany nudged the single currency higher but today’s move has more to do with the fall in the US dollar," he noted.

For the greenback, Friday turned out to be a day of downs on major pairs. It lost ground on the euro, aussie, loonie, kiwi, rand and yen. It and Wall St were recovering from a sell-off earlier in the week sparked by concerns Trump could be impeached.

"The lingering political storm in the US surrounding President Trump continues to heap some pressure on the dollar," said Chris Saint, senior analyst at HL Currency Service.

This cast doubts over whether he could deliver the pro-growth economic reforms that were supporting expectations for the Fed to carry on lifting rates gradually this year, he said.

Otunuga said the Friday selling pressure on the dollar highlighted how the focus remained on the political instability in Washington and growing uncertainty over the future of Trump’s administration.

"With those who were heavily optimistic over Trump's proposed fiscal policies now having second thoughts amidst this uncertainty, the dollar could become a seller’s best friend."

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