Schedule pound to dollar at intervals of 1 day
The pound sterling hit a more than six-week high against the dollar on Tuesday, amid the continued decline in the dollar and a positive surprise from UK labor data supporting the currency.
The pound crossed the $ 1.40 mark on Monday for the first time in nearly a month, gaining 1% as it benefited from a general weakening dollar, which was hit by a return to risk sentiment and lower volatility in global markets.
It extended its gains, reaching its highest level since March 4 at $ 1.4009 at the start of Tuesday, and then rebounded slightly. Against the dollar by 8:00 GMT, it is trading unchanged since the beginning of the day and is down 0.3% against the broadly strengthening euro, sitting at 86.25 pence.
Petr Krpatata, chief strategist for currency and interest rates at ING EMEA, said the pound is benefiting from two things – a rebound after a corrective fall caused by a reduction in excessive long speculative positions in early March, and an increase in the euro / dollar rate.
“We forecast that the sterling / dollar pair will remain consistently above $ 1.40 this quarter, while the euro / pound sterling should return to 85p. With UK data likely to be strong this quarter – fueled by rapid vaccinations and the economic reopening effect – the pound should find support. ”
Pound speculators’ net long position against the dollar recovered in the week leading up to April 13, after falling to a low since February the previous week, CFTC futures data showed.
Sterling correlates with global growth and tends to benefit from a positive attitude toward risk. It was one of the best in the G10 currency group this year, as investors hope the fast pace of vaccinations in the UK will lead to a strong economic recovery after the country’s worst recession in 300 years.
Tuesday’s data added further signs of economic recovery. The UK unemployment rate unexpectedly fell for the second straight month to 4.9% between December and February, according to official figures, most of which was lived by the country under strict COVID-19 quarantine.
Most economists polled by Reuters predicted that the unemployment rate, constrained by the government’s huge plan to subsidize jobs, would rise to 5.1% from 5.0% in the three months to January.
Investors will be watching UK inflation data on Wednesday and retail sales data on Friday for further signs of economic recovery.