AIRLINK 196.38 Increased By ▲ 4.54 (2.37%)
BOP 10.11 Increased By ▲ 0.24 (2.43%)
CNERGY 7.75 Increased By ▲ 0.08 (1.04%)
FCCL 38.10 Increased By ▲ 0.24 (0.63%)
FFL 15.74 Decreased By ▼ -0.02 (-0.13%)
FLYNG 24.54 Decreased By ▼ -0.77 (-3.04%)
HUBC 130.38 Increased By ▲ 0.21 (0.16%)
HUMNL 13.73 Increased By ▲ 0.14 (1.03%)
KEL 4.60 Decreased By ▼ -0.07 (-1.5%)
KOSM 6.19 Decreased By ▼ -0.02 (-0.32%)
MLCF 44.85 Increased By ▲ 0.56 (1.26%)
OGDC 206.51 Decreased By ▼ -0.36 (-0.17%)
PACE 6.58 Increased By ▲ 0.02 (0.3%)
PAEL 39.77 Decreased By ▼ -0.78 (-1.92%)
PIAHCLA 17.20 Decreased By ▼ -0.39 (-2.22%)
PIBTL 7.99 Decreased By ▼ -0.08 (-0.99%)
POWER 9.20 Decreased By ▼ -0.04 (-0.43%)
PPL 178.91 Increased By ▲ 0.35 (0.2%)
PRL 38.93 Decreased By ▼ -0.15 (-0.38%)
PTC 24.31 Increased By ▲ 0.17 (0.7%)
SEARL 109.27 Increased By ▲ 1.42 (1.32%)
SILK 1.00 Increased By ▲ 0.03 (3.09%)
SSGC 37.75 Decreased By ▼ -1.36 (-3.48%)
SYM 18.83 Decreased By ▼ -0.29 (-1.52%)
TELE 8.53 Decreased By ▼ -0.07 (-0.81%)
TPLP 12.14 Decreased By ▼ -0.23 (-1.86%)
TRG 64.76 Decreased By ▼ -1.25 (-1.89%)
WAVESAPP 12.11 Decreased By ▼ -0.67 (-5.24%)
WTL 1.64 Decreased By ▼ -0.06 (-3.53%)
YOUW 3.87 Decreased By ▼ -0.08 (-2.03%)
BR100 12,000 Increased By 69.2 (0.58%)
BR30 35,548 Decreased By -112 (-0.31%)
KSE100 114,256 Increased By 1049.3 (0.93%)
KSE30 35,870 Increased By 304.3 (0.86%)
Markets

Sterling hovers above 6-month lows on Brexit fears as data eyed

LONDON: Sterling hovered near a six-month low against the dollar on Monday as investors continued to bet on lower Br
Published July 8, 2019

LONDON: Sterling hovered near a six-month low against the dollar on Monday as investors continued to bet on lower British interest rates and added to their short positions on the currency.

As major central banks around the world including the US Federal Reserve shift towards monetary policy easing, investors are betting that the Bank of England will also follow suit.

Last week it fuelled investors' hopes of a 25 basis point cut over the next 12 months, hurting the pound. Money markets are pricing in a 50% chance of one rate hike until the end of December.

Uncertainty over Britain's departure from the European Union, as well as over who will become the new prime minister and lead the country out of the bloc, added to sterling's weakness.

The pound was 0.2% weaker at $1.2507, not far from the $1.2481 low reached on Friday. Against the euro, sterling was broadly flat at 89.660 pence, still below the key psychological level of 90.

Latest data from the Commodity Futures Trading Commission reflected the pessimism over the British currency's outlook, with speculators extending their short positions in the pound to $4.68 billion, the highest level since early February.

"What's happening in the dollar will drive cable (sterling-dollar) for now," said Thu Lan Nguyen, an analyst at Commerzbank. "Brexit as a driver will become more relevant as Oct. 31 deadline approaches."

Traders will be watching gross domestic product data on Wednesday, though its influence on the pound could be negligible given that the BoE focuses on more forward-looking data, said Nguyen.

A Reuters poll of economists forecasts the British economy will have grown 0.1% in the three months to end-May, down from 0.3% in the three months to end-April.

"Activity data remains sluggish and we continue to think that 2Q19 UK GDP could be flat quarter-on-quarter," ING economists said in a note.

Copyright Reuters, 2019

Comments

Comments are closed.