Sterling steady in thin August trading

A British pound note is seen in front of a stock graph in this November 7, 2016 picture illustration. — Reuters file pic
A British pound note is seen in front of a stock graph in this November 7, 2016 picture illustration. — Reuters file pic

LONDON, Aug 14 — The pound was steady today as thin August trading kept investors on the sidelines.

Sterling was last flat at US$1.3067 (RM5.48) and at 90.35 pence against the euro. It has risen nearly seven per cent in the last three months against the US dollar, almost exclusively on the back of the greenback weakening.

“It’s summer markets, nothing is going to happen, it’s all about the bond market at the moment,” said Kenneth Broux, head of corporate research at Societe Generale.

Borrowing costs in Europe have tracked US Treasuries this week, which have been driven to new highs by a deluge of debt issuance in the United States.

Next week, Britain releases inflation data on Wednesday and retail sales today, with both expected to be lower. Marshall Gittler, head of investment research at BDSwiss Group, said weaker data could make “further loosening more likely” by the Bank of England.

Coronavirus cases are rising in some parts of the world, which has prompted the British government to impose quarantine on many tourists returning from holidays.

Late yesterday, it announced that it would require arrivals from France, the Netherlands and Malta to quarantine from 0300 GMT tomorrow because infection rates there were too high, dealing a new blow to the travel industry.

The UK can ill afford another coronavirus-induced slump after posting a 20 per cent drop in second-quarter GDP. In October it is due to end a furlough scheme that has allowed millions to retain their jobs.

Prime Minister Boris Johnson has ordered the reopening of the economy in England to resume, saying a rise in infections that prompted caution two weeks ago had now levelled off, and warned of harsher punishment for those who breach the remaining restrictions. — Reuters

Related Articles