Reuters logo
UPDATE 1-Sterling gets a leg-up from data, but boost short-lived
November 10, 2017 / 11:55 AM / in 9 days

UPDATE 1-Sterling gets a leg-up from data, but boost short-lived

(Adds details, quotes)

By Polina Ivanova

LONDON, Nov 10 (Reuters) - Sterling gained brief respite on Friday after better-than-expected data, but signs of strength in British industry failed to lift the mood of gloom over Brexit that has weighed on the currency.

With a turbulent week for domestic politics ramping up doubts about Prime Minister Theresa May’s ability to secure a good divorce deal, strong data on trade and industrial output provided a welcome boost for the pound.

“The sharp upward trajectory of the industrial sector shouldn’t be overlooked... Small steps in the right direction must be celebrated at a time where political dismay and negotiations across the Channel dominate headlines,” said Alex Lydall, head of dealing at Foenix Partners, a currency risk management consultancy.

But sterling’s gains were short-lived.

It rose 0.1 percent to the day’s highs of $1.3169 following the data, but then edged back down to trade at $1.3157. It was flat against the euro at 88.55 pence .

The pound plunged last week after the Bank of England raised interest rates for the first time in more than 10 years but said the market should expect only two more hikes in the next three years, leading investors to push back their expectations.

A string of scandals in Westminster, leading to two resignations from the cabinet in the space of a week, could also be expected to push investors away from the pound.

But high levels of uncertainty in British politics have largely been priced in by the markets, analysts said, sheltering sterling to some degree.

“(Sterling) is so weak that it takes a lot of bad news to get it any lower,” said Juckes. “It’s all terrible, but we know it’s terrible, so we’ve priced it as terrible.”

British Brexit minister David Davis will meet his EU counterpart in Brussels on Friday as the divorce talks resume.

Meanwhile, traders are looking ahead to UK inflation, wages, the labour market, and retail sales data due next week. (Reporting by Polina Ivanova; Editing by Saikat Chatterjee and John Stonestreet)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below