Battered sterling gets respite but set for weekly fall vs dollar

Published On : 05/13/2022

By Lucy Raitano

LONDON (Reuters) – Britain’s pound edged up against the dollar on Friday, offering some respite from a week of selling that pushed the currency to two-year lows.

By 0835 GMT, the pound was up 0.21% at $1.2216, a day after falling to a fresh two-year low of $1.2165 as a slew of data pointed to a weakening British economy.

Kenneth Broux, European currency strategist at Societe Generale, said that while sterling was enjoying a respite, he wouldn’t read too much into any currency gains.

We’ve had quite bad GDP data from March, and the stagflationary backdrop for the UK is not really great, then you’ve got tension boiling over in Northern Ireland over the Protocol,” he said,

Senior British politicians want to overhaul the agreement on trade between Northern Ireland and the United Kingdom that they signed up to in order to get Brexit done. They have warned they might have to take unilateral action.

Data on Thursday showed Britain’s economy unexpectedly shrank 0.1% in March after a slump in car sales due to supply-chain problems.

That has exacerbated concerns about a weakening growth outlook that could slow the Bank of England’s rate-hiking cycle and battered the pound.

While sterling is up against the dollar for the first time in over a week, the currency was heading for a fourth straight week of falls.

The way ahead looks likely to remain very uneven for the pound,” ING currency strategists said in a note.

And sterling was lower against the euro, down almost a fifth of a percent at 85.24 pence.

(Reporting by Lucy Raitano; Editing by Dhara Ranasinghe and Emelia Sithole-Matarise)

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.