Sterling struggles as markets take Brexit breather

LONDON – Sterling fell around a quarter of a percent against the euro and underperformed gains for other major currencies against the dollar on Thursday as nerves around Brexit and the strength of the UK economy weighed on prices.

The pound – down by around a fifth in just over a year against the dollar – has been stuck in a 3-cent range for a month, absent dramatic developments in the government’s move towards launching Brexit talks next month.

There have been negative signs from a handful of economic data, with wages numbers on Wednesday dipping below forecasts, but so far not enough to provoke another more aggressive round of pound selling.

“The market is clearly taking a breather before the next round of Brexit news,” said Jane Foley, a strategist with Rabobank in London.

“Once the talks start properly the full complexity of the situation will become a lot more obvious. Meanwhile, the market is getting further proof that real earnings are going to be significantly lower by the end of the year. Sterling will be up for a rocky ride at the very best.”

The pound was up 0.3 percent at $1.2490 in afternoon trade in London, compared to gains of around 0.6 percent for the euro and yen against the dollar. It dipped a quarter of a percent to 85.35 pence per euro.

Dealers said there had been resistance to more gains against the dollar at around $1.2520.

“It has really been technical trading today,” said one London-based broker. “Sterling hit resistance above $1.25 this morning and then came back but I guess that in part reflects how many people still prefer being short of the pound.”

A number of major banks have again called for sterling to fall below $1.20 as talks on Britain’s departure from the European trading bloc develop later this year.

Retail sales numbers due on Friday will provide the next clue to the broader strength of the UK economy, which has proved consistently more robust than expected in the face of Brexit nerves since last June.

Sales growth is expected at 3.4 percent year on year in January.

“The pound has done a great job holding up into Thursday, seemingly on the back of a market that does not want to get too aggressive with U.S. dollar long bets in the face of Trump protectionism and Trump uncertainty,” analysts from LMAX said.

“Data hasn’t exactly been supportive. Meanwhile, Brexit remains a big concern.” – Reuters 

Related Posts
Federal Reserve keeps key rate unchanged
WASHINGTON — The Federal Reserve kept interest rates unchanged on Wednesday but signaled confidence in the US economic outlook, leaving the door open to a hike in June. The US central ...
READ MORE
African states mull adopting yuan as forex reserve: Chinese official
JOHANNESBURG (Reuters) - African countries discussed adopting the yuan currency as a foreign exchange reserve during meetings with China at a summit in South Africa, a senior Chinese official said ...
READ MORE
South Africa’s rand flat after relief rally
Johannesburg - The rand moved sideways early on Tuesday in thin, range-bound trade following its brief relief rally ahead of the holiday season. By 0700 GMT the rand edged down 0.03 ...
READ MORE
Wheels turn in African markets
Africa, home to the fastest growing economies in the world, is the next frontier for the automotive sector where the number of vehicles sold is expected to reach almost 2.7 ...
READ MORE
How to get a bang for your buck in 2015!
JOHANNESBURG, – 2014 was a troubling year for Zimbabwean investors. The industrial index lost 20 percent and the real estate market underperformed as shown by financial results of property funds. Despite ...
READ MORE
Traders work on the floor of the New York Stock Exchange January 26, 2016. REUTERS/Brendan McDermid
LONDON, - European shares fell on Monday, pulled lower by telecom equipment stocks amid investor disappointment over the terms of a deal between Nokia and Samsung to settle a legal ...
READ MORE
Markets catch a chill as oil falls back below $30
LONDON - World stocks were set for a third straight week of losses on Friday and commodity currencies took another drubbing as oil prices fell back below $30, keeping alive ...
READ MORE
Internal devaluation only way to regain competitiveness: IMF
INTERNAL devaluation is the only option for Zimbabwe to regain its competitiveness, the International Monetary Fund (IMF) has said. Fidelity Mhlanga IMF resident representative Christian Beddies told businessdigest on Wednesday in Harare ...
READ MORE
Heavyweights gains prop ZSE in thin volumes
HARARE,– The local bourse traded positively on Wednesday, with the main industrial index picking 0,66 points to 164,41 points after recording gains in selected heavy weight counters although volumes remained ...
READ MORE
Mobile money can drive economic growth – Moody’s
HARARE,– Zimbabwe is among several sub-Saharan countries that stand to benefit from the growth of mobile phone banking which has potential to boost economies and create opportunities for banks, global ...
READ MORE
Federal Reserve keeps key rate unchanged
African states mull adopting yuan as forex reserve:
South Africa’s rand flat after relief rally
Wheels turn in African markets
How to get a bang for your buck
Mixed bag in World stocks on weak China
Markets catch a chill as oil falls back
Internal devaluation only way to regain competitiveness: IMF
Heavyweights gains prop ZSE in thin volumes
Mobile money can drive economic growth – Moody’s

Arts & Entertainment

Arts & Entertainment

Drake ends Sheeran’s Billboard 200 reign, smashes streaming record

27th March 2017 Staff Reporter 0

Drake ended Ed Sheeran’s two week reign atop the Billboard 200 album chart on Monday, selling a monster 505,000 copies of his new album “More Life,” according to figures from Nielsen SoundScan. The Canadian rapper, […]

Arts & Entertainment

Ex-Utakataka bassists to launch album in Mzansi

25th March 2017 Staff Reporter 0

RONNIE Mudhindo’s musical journey is not complete without the mentioning of his early days with the late Tongai “Dhewa” Moyo and Utakataka Express band. The reference involves both sweetness and sourness. Utakataka fans may remember […]