Sterling Trades Near 3-week Lows Versus Rebounding Dollar
Sterling trades near 3-week lows versus rebounding dollar By
Published: 18:46 AEDT, 27 August 2015 | Updated: 18:46 AEDT, 27 August 2015
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LONDON, Aug 27 (Reuters) - Sterling hovered near a three-week low against a rallying dollar on Thursday, with investors uncertain about when the Bank of England will raise interest rates, given the volatility in global stock markets.
With a semblance of calm returning to global financial markets, in part due to reassurances from influential Federal Reserve policymaker William Dudley that U.S.
rates will stay lower for longer, sterling was outperforming low-yielding currencies like the euro and the safe-haven yen.
Both the euro and the yen were in vogue during the recent stock market selloff as investors bought back these currencies which they had sold earlier to fund investments in higher-yielding currencies.
The euro was also weighed down by comments from a senior European Central Bank official who left the door open for more easing.
Peter Praet said on Wednesday the risk of the ECB missing its inflation target has increased due to commodity price falls and weakness in some overseas economies.
Sterling was trading at $1.5480 not far from a low of $1.5453 hit on Wednesday, https://pinfaves.com/peter-jackson-weight-loss/ its lowest level since August 7.
For the week it has lost 1.3 percent and was on track for its biggest weekly loss against the dollar since late May.
It was 0.2 percent higher against the euro, trading at 73 pence per euro
"Sterling has been underperforming on the back of the equity sell-off, where the large weight of financial services in the UK economy typically weighs at times like these," said Chris Turner, head of currency strategy at ING.
"Despite this sell-off, we still think euro/sterling is far too high at current levels and UK hard data should hold up."
Money markets have pushed out the timing for a BoE hike to around the third quarter of next year compared with early 2016 when the central bank published its quarterly inflation report three weeks ago.
Fears of a global slowdown intensified since China devalued its currency and data pointed to further signs of weakness.
These factors triggered sell-off in Chinese stocks and spilled over to global stock markets.
Focus was now turning to an annual conference in Jackson Hole, Wyoming, attended by many of the world's top central bankers. BOE Governor Mark Carney is a panelist at the symposium on Saturday where global inflation dynamics will be discussed.
Earlier this month Carney indicated a decision to raise rates could come at the turn of the year, but investors will be keen to hear the BoE's take on recent events and whether it changes the monetary policy outlook for the near term.
Recent UK economic data has sent mixed signals.
The housing market and rebound in core inflation look strong enough to warrant higher interest rates, analysts say, but retail sales figures were well short of expectations. (Reporting by Anirban Nag; Editing by Janet Lawrence)
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