Sterling hit a 15-month high against a weak dollar on Friday, but fell versus the euro as investors braced for a quicker pace of tightening by the European Central Bank than by the Bank of England. Sterling hit a high of $1.6430 after data showed producer prices in the UK rose faster than expected in March. By mid-afternoon it was up 0.4 percent on the day at $1.6387.
The pound has risen more than 5 percent against the struggling greenback this year, and Friday's peak was the highest since January 2010. With the greenback under strong downward pressure - the dollar index is at its lowest since December 2009 - analysts said a 16-month high of $1.6459 was a possible target for sterling.
The data may add to pressure on the BoE to hike rates sooner rather than later, after it left them at a record-low 0.5 percent on Thursday. "We had a higher-than-expected number. That's a bit of a hawkish signal for the Bank of England and would possibly make a May rate hike next month slightly more likely," said Tom Levinson, currency strategist at ING.
The euro rose to a 15-month high against the dollar, staying well-supported in the wake of a euro zone rate hike. Sterling pared some of its losses against the euro after the UK inflation numbers, but eased back again and was last down 0.6 percent on the day at 88.10 pence.
Comments
Comments are closed.