Shutterstock photo
Markets

Forex - Sterling rises, re-approaching multi-year highs

Shutterstock photo

Shutterstock photo

Investing.com -

Investing.com - The pound rose against the dollar on Monday, recovering after posting the largest one-day decline since February in the previous session, as expectations for a U.K. rate hike in the first quarter of next year underpinned investor demand.

GBP/USD was up 0.28% to 1.6896, recovering from lows of 1.6831 struck late Friday. The pair rose to highs of 1.6994 early last week, the most since August 2009.

Cable was likely to find support at 1.6831 and resistance at 1.6975.

The pound was boosted by expectations that the Bank of England will revise up its forecast for growth when it presents its quarterly inflation report on Wednesday.

The latest U.K. jobs report, also due for release on Wednesday, is expected to show a another decline in the unemployment rate to a more than five year low of 6.8% in the three months to March, while wage growth is expected to rise again.

A strong reading would reinforce expectations that the BoE will raise interest rates ahead of other central banks.

The BoE left rates on hold at the conclusion of its two-day policy meeting on Thursday, in a widely anticipated decision.

Sterling weakened against the broadly stronger dollar on Friday as its recent run higher prompted profit taking.

Data on Friday showing that British factory output grew at its fastest quarterly rate in nearly four years during the first three months of the year.

Output grew 1.4%, up from 0.6% in the fourth quarter of 2013.

A separate report showed that the U.K. trade deficit narrowed unexpectedly in March.

Elsewhere, the pound rose to almost one-and-a-half year highs against the euro, with EUR/GBP down 0.20% to 0.8147.

The single currency remained under pressure after European Central Bank President Mario Draghi said Thursday the bank is "comfortable" with acting to shore up growth and stop inflation from falling too low at its next meeting in June.

Investing.com offers an extensive set of professional tools for the financial markets.

Read more News on Investing.com and download the new Investing.com Stocks & Forex App for Android!

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

ForEx