The Pound Sterling edged higher against the US Dollar and cemented recent gains as FX traders await next week’s earnings data to provide some fresh momentum. Though the Pound had a strong start at the beginning of the year, uncertainty over the government’s ability to secure a favorable trading agreement with the European Union has hampered any potential optimism of a quickened pace from the Bank of England. Initially, hawkish comments from leadership at the UK central bank led to increased speculation that rates would rise at a faster pace than initially forecast; that helped provide solid support for Sterling. The latest survey shows 70% of experts polled are calling for a May rate hike.
As reported at 10:45 am (GMT) in London, the GBP/USD was trading at $1.407, a gain of 0.48% and moving just off the session peak of $1.4078. The EUR/GBP is trading at 0.88766 Pence, down 0.2025%; the pair has ranged from a session trough of 0.88688 Pence to a peak of 0.89021 Pence.
Broadly Lower Dollar as Deficit Woes Weigh
The broad fall in the US Dollar also provided a lift to the Pound. Markets are worried over the possibility of a twin deficit given increased government spending and the recently passed tax cut package. Even yesterday’s news that CPI was unexpectedly higher than predicted only provided a brief opportunity for Dollar bulls. The USD/JPY was trading at 106.543 Yen, down 0.38%; the pair earlier hit a session low of 106.174 Yen, while the peak is at 107.014 Yen.
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