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Sterling edges off 14-month lows but Brexit checks gains

Sterling edges off 14-month lows but Brexit checks gains

LONDON: Sterling edged up from 14-month lows on Thursday but it gains were marginal despite strong British retail sales with the currency hamstrung by fears over Britain leaving the European Union.

Hot weather and the World Cup boosted retail sales in July, data showed, but that offered little respite for the pound which traded just above the $1.27 level.

A strong dollar and a crescendo of fears that Britain will fail to secure an agreement before leaving the EU in March have weighed on the pound as hedge funds bet against it.

It has shed 12 percent of its value since April and on Wednesday sank to $1.2662, its weakest since June 2017.

Few saw a Bank of England interest rate hike earlier this month as a vote of confidence in the economy, since Britain’s future, and access to European markets, remains in doubt.

“Future interest rate rises now seem a distant prospect and Brexit continues to cause uncertainty … even this good economic performance is unlikely to translate into a lasting boost for sterling,” said Lee McDarby, an executive at currency brokers Moneycorp.

At GMT 1515 the pound was up 0.3 percent against the dollar at $1.2733 and broadly flat versus a surging euro at 89.5 pence per euro.

Copyright Reuters, 2018

Source: Brecorder

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