British Pound Stabilises Against US, Euro
After not too good November for the US dollar, the British Pound sterling has consolidated its strength against the World’s dominant currency with a clip on Euro.
On Tuesday, market data showed that the British pound remained below the $1.27 mark as investors processed final purchasing manager index (PMI) data while evaluating the monetary policy outlook at both the Bank of England and the Federal Reserve.
Sterling was flat at 85.80 pence per euro. It retraced earlier this week after hitting its highest since Sept. 11 on Friday — at 85.60 pence per euro — as analysts have mixed views about the policy path of the ECB and the BoE.
The latest PMI survey revealed that Britain’s private sector activity returned to growth in November after a three-month contraction.
Meanwhile, investors anticipate the Bank of England making its first rate cut by June, contrasting with the Federal Reserve’s expected timeline of May. Nigeria Eurobond Slumps after CBN Resumes OMO Auction
Last week, Governor Andrew Bailey stated that the central bank would take necessary measures to bring inflation down to its 2% target.
A day earlier, Deputy Governor Dave Ramsden suggested that Britain’s monetary policy might need a “restrictive” approach for an extended period to guide inflation back to the central bank’s targeted 2%.
For now, the broader trend remains on the upside, particularly with the Federal Reserve appearing more likely to ease monetary policy before the Bank of England. At the beginning of the week, exchange rate was 1.2634 dollars per British pound after losing 0.61% vs. the dollar