Pound rate today: British pound falls below $ 1.39, worst week since September 2020
The pound fell against a strengthening dollar on Thursday after the Fed surprised markets by signaling it would raise interest rates and end emergency bond purchases earlier than expected.
On Friday, it fell further against the dollar and the euro. At 2:49 p.m. GMT, it was down 0.3% on the day to $ 1.3816, after hitting as low as $ 1.3815 – its lowest since May 3. He was on track for his worst week since September 2020.
Against the euro, it fell around 0.4% to 85.855 pence per euro, on track for a small weekly decline.
UK retail sales fell 1.4% between April and May as the lifting of lockdown restrictions encouraged spending in restaurants rather than in stores. The data did not have a clear impact on the pound.
“GBPUSD remains stuck below 1.39 due to a confluence of general dollar strength and slight deterioration in near-term data,” said Simon Harvey, senior currency analyst at Monex Europe.
“The limited impact of the data on the pound sterling is largely due to the fact that retail volumes remain above pre-pandemic levels and a shift in consumption patterns towards services after the reopening of the May 17 was still likely. ”
For cable, market players are weighing on the relative pace of any monetary tightening by the Bank of England and the Fed. The BoE will then meet on June 24.
BofA strategists told clients in a note that they had changed their minds on the central bank’s tightening path and now expect a 15 basis point rate hike in May 2022, when they previously did not expect any increase in 2022.
Investors are also monitoring a dispute between Britain and the European Union over post-Brexit trade in the British province of Northern Ireland, which has a land border with EU member Ireland.
“Brussels’ patience with London to have its cake and eat it is running out. Indeed, there is a risk that protocols will be triggered and that the tariffs will be threatened more seriously”, wrote the strategists of ING in a statement. note to customers.
“So the next few weeks could be a vulnerable time for cable, where a breakout of 1.3890 opens 1.3800 / 3810 – the last stop before an extension of the March / April lows to 1.3675.”
British Prime Minister Boris Johnson has said he is very confident he will be able to lift the remaining restrictions on coronaviruses by his new target date of July 19, based on the most recent data.