Latest news with #sterling
Daily Mail
02-06-2025
- Business
- Daily Mail
Pound races towards three-year high against the dollar as Trump's trade war sends the greenback tumbling
The pound raced towards a three-year high against the dollar yesterday as the latest skirmishes in Donald Trump's trade war sent the greenback tumbling. With fears over the health of the US economy mounting, sterling rose as much as 0.7 per cent to $1.3557, while investors seeking safety pushed gold back towards its recent all-time high of $3,500 an ounce. The dollar has fallen 9 per cent against a basket of major currencies this year and analysts at Morgan Stanley are predicting a further 9 per cent drop over the next 12 months. That could push sterling – just below last month's three-year high of $1.3593 – back towards $1.50. The latest ructions on the foreign exchange markets came after Trump threatened to increase tariffs on imported steel and aluminium to 50 per cent from 25 per cent from tomorrow, dousing hopes his stance on trade was softening. Sentiment was also hit by an escalation in tensions between Washington and Beijing – with each side accusing the other of 'violating' a truce – suggesting a pause on the US-China trade war has ended. 'The flip-flopping on policy looks set to continue,' said Derek Halpenny at financial group MUFG. 'That is likely to give investors reason to renew selling of the US dollar.'
Daily Mail
20-05-2025
- Business
- Daily Mail
Sterling help for the Bank of England as Trump's tariffs and tantrums put the dollar in the doldrums: ALEX BRUMMER
The recent rise in the sterling exchange rate against the dollar has gone almost unremarked. Concern about the mayhem caused by the threat and reality of Trump tariffs, verbal assaults on the Federal Reserve and worries about the federal budget deficit have driven the US currency down and the pound higher. Stronger sterling acts as a barrier against imported inflation. That should provide some comfort ahead of today's release of consumer prices projected to climb to 3p or above. Inflation is being driven higher by regulated energy bills and labour costs following the rise in employers' National Insurance last month and the living wage. The dollar has fallen 10.6 per cent against an index of foreign currencies since January – one of the sharpest three-month declines in recent history. Sterling is among the winners. Returning from a recent reporting trip to the US, I was surprised that my overpriced hotel bill had been translated back to sterling at a reasonable $1.32 exchange rate. Recovery: The pound climbed to $1.34, its highest level in four years in latest trading having plunged towards parity with the greenback during the Truss tantrum in September 2022 The pound climbed to $1.34, its highest level in four years, in latest trading – having plunged towards parity with the greenback during the Truss tantrum in September 2022. Reasons behind the pound's rise are manifold. UK bank rate at 4.25 per cent is elevated despite four cuts in the last year. Growth in the first quarter outpaced G7's rich competitors and confidence in American economic leadership has been eviscerated. Sterling's revival will be encouraging for British travellers to America this summer. The pound's advance is an unexpected gift for UK consumers and the Bank of England. Oil, gas and other raw materials and many intermediate goods are priced in dollars and should become less expensive. The impact should not be underestimated. The Bank of England's chief economist Huw Pill argues that quarterly cuts in interest rates since midway through last year had been 'too rapid'. He says that disinflation is 'not complete'. That explains why he was among the interest rate setters to vote against a cut at last week's three-way split session of the Monetary Policy Committee. Pill's hard line chimes more with the Fed than Britain's new friends in Brussels. Business, consumers and the Government itself need cheaper borrowing to foster growth and offset £40billion of punishing Labour tax hikes. Crossed lines Vodafone has made terrible decisions since it slipped from being the world's biggest mobile player to an also-ran. Few have been more costly than the £15.5billion of shareholder funds poured down the drain in 2019 when former chief executive Nick Read bought German cable operations from Liberty Media. Since then, Voda shares have tumbled 40 per cent and the write-downs continue with £3.9billion wiped off the value of operations in Germany and Romania in the last financial year. Chief executive Margherita Della Valle is optimistic that the worst is over in Germany after a 50 per cent slump in the TV customer base as it adjusted to a change governing consumer choice in apartment blocks. But who can be sure? Della Valle's best hope for the future rests in the UK, having persuaded the competition authorities that a £16.5billion merger of its UK business with Three would be a good thing. She promised heavy investment in a dilapidated network starting with £1.5billion in the coming year. Better service but doubtless at higher prices for consumers. A promised £1.7billion share buyback provided a temporary respite for the stock. But Della Valle is swimming against heavy tides. Gas guzzler If Shell boss Wael Sawan is plotting to create a great British energy champion by buying BP, his ambition is well disguised. Sawan cautioned at the company's annual meeting that the bar for mega-deals was 'very high' and prioritised buybacks and liquefied natural gas (LNG). The LNG push raised investor ire with activists winning 20.6 per cent support for a resolution requiring the firm to report on how the pursuit of gas is compatible with cutting carbon emissions. One suspects the only way to tempt Shell into the BP fray would be if one of the US majors – Exxon or Chevron – showed an interest. Then the bar for a British buyer could be lowered very rapidly in the name of future-proofing UK energy security and the FTSE 100.
Free Malaysia Today
14-05-2025
- Business
- Free Malaysia Today
Sterling snaps seven-day streak of gains against the euro
The euro was up 0.35% to £0.8433, after seven consecutive days of declines. (EPA Images pic) LONDON : Sterling slid against the euro today after seven straight days of gains, while it rose against a weakened US dollar as the market shed the initial optimism from a de-escalation in US-China trade tensions at the beginning of the week. The euro was up 0.35% to £0.8433, after seven consecutive days of declines. It hovered around early April levels, halting a progressive slide against the pound from a peak at £0.8738 on April 11. 'It does seem that the 84 level is offering pretty good support,' Rabobank's head of FX strategy Jane Foley said, adding that sterling may struggle to advance further against the euro unless growth data starts to significantly improve in Britain relative to market expectations. 'There is a risk that growth could come in below the 1% level for 2025. 'If those risks increase, I think sterling will again be on the back foot against the euro,' she said. British gross domestic product (GDP) data for both March and the first quarter as a whole will be released tomorrow. It will give initial hints at where 2025 growth lands, but could also complicate the picture. Sanjay Raja, senior economist at Deutsche Bank, expects the quarterly data to show a significant jump, but a short-lived one, and that GDP will shrink in the second quarter. That adds additional uncertainty for investors trying to judge the Bank of England (BoE)'s policy path. Data published yesterday showed a fall in employment but economists said the drop appeared modest. BoE interest rate-setter Catherine Mann said today that she voted to keep borrowing costs on hold last week – having sought a large 50-basis point cut in February – because Britain's labour market had been more resilient than she expected. The market is pricing in a around 50 basis points of easing by the end of the year, with no change in policy at the next BoE meeting in June, but a cut by a quarter of a point expected in August. The pound gained 0.38% on the dollar to US$1.33535, as the greenback extended its losses against other currencies after weaker-than-expected US consumer inflation data bolstered the case for Federal Reserve easing just as global trade tensions cool. 'So much of what's happening in cable has been driven by the US dollar,' Foley said, referring to the sterling/dollar pair.
Wall Street Journal
13-05-2025
- Business
- Wall Street Journal
Sterling Overlooks U.K. Labor Report Due to Data Quality Issues
0857 GMT – Data quality issues surrounding the official U.K. labor market report means sterling traders largely overlooked Tuesday's data release, Monex Europe analysts say in a note. As with other G-10 currencies, U.S. inflation data at 1230 GMT are the main event for sterling, they say. This poses 'further downside risks to the pound against the dollar.' Speeches from Bank of England chief economist Huw Pill at 0945 GMT and BOE Governor Andrew Bailey at 1600 GMT will also garner attention. Sterling rises 0.3% to $1.3210. The euro falls 0.1% to 0.8412 pounds. The U.K. unemployment rate rose to 4.5% and wage growth excluding bonuses eased to 5.6% in the three months to March, official data showed. ( 0854 GMT – The dollar could receive some support if data later show U.S. core inflation remained sticky in April, ING analyst Chris Turner says in a note. That would 'feed into the narrative that the Federal Reserve is in no hurry to cut interest rates.' This month markets have scaled back rate-cut bets and pushed back expectations for the next cut until September, he says. Economists in a WSJ survey expect the data at 1230 GMT to show core inflation rose to 0.3% month-on-month in April compared to 0.1% in March. The DXY dollar index falls 0.2% to 101.541, having reached a one-month high of 101.977 on Monday after the U.S. and China agreed to a 90-day reprieve in tariffs. (
Zawya
08-05-2025
- Business
- Zawya
Sterling strengthens after BoE rate decision
TOKYO/GDANSK: The pound strengthened on Thursday after the Bank of England cut its main interest rate by 0.25 percentage points to 4.25%, with an unexpected three-way split among policymakers, including two who voted to keep rates unchanged. At 1114 GMT, sterling had gained 0.24% on the U.S. dollar to $1.33215 and 0.9% against the yen at 192.80, while the euro extended its losses on the pound to trade down 0.3% at 84.78 pence. It had previously been relatively flat against the dollar after U.S. President Donald Trump said the United States and Britain will announce a deal to lower tariffs on some goods later in the day. "There's certainly been some surprise with a couple of votes for rates unchanged," said Dominic Bunning, head of G10 FX strategy at Nomura, adding that sterling's slightly positive reaction is to a higher bar to cutting rates faster for now. The BoE's Monetary Policy Committee voted 5-4 in favour of the decision to cut rates by a quarter point. Two members, Swati Dhingra and Alan Taylor, voted for a bigger half-point cut while Chief Economist Huw Pill and external member Catherine Mann wanted to keep interest rates on hold. "The report doesn't change a huge amount in the long term, but it's understandable sterling has had a little bit of a bounceback on what seems to be modestly hawkish bias on the initial read of things," Bunning said. Markets now price in 59 basis points of BoE rate cuts by the end of the year. Elsewhere, the dollar held gains against a basket of other currencies. It rose by about half a percentage point to 144.68 yen and by a modest 0.2% to 0.8250 Swiss francs, extending gains made the previous day after the Federal Reserve affirmed its wait-and-see approach and helped by Trump's deal announcement. Posting on his Truth Social platform, Trump said he would hold a press conference at 1400 GMT about a "full and comprehensive" trade agreement with Britain, revealing the identity of the country it had withheld in an earlier statement and confirming a New York Times report. The euro was flat at $1.13, following a 0.56% decline on Wednesday that was its biggest in two weeks. The U.S. dollar index, which measures the greenback against six major peers, edged up 0.2% to 100.05. Last week, Trump said he had "potential" trade deals with India, South Korea and Japan. "The market is running with the idea that any trade deal is good news, because it provides a certain degree of clarity and could provide a template for others to follow," said Rodrigo Catril, senior FX strategist at National Australia Bank. At the same time, a British trade deal is considered among the easier negotiations, while talks with Europe and particularly China are expected to be more complicated, he said ahead of details on the deal. "The devil will be in the details," Catril said. "These deals are not going to come for free." Investors will watch closely for any signs of thaw when U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer meet China's economic tsar, He Lifeng, on Saturday in Switzerland. Trump suggested on Wednesday that Beijing initiated the talks, and said he was not willing to cut tariffs on Chinese goods to nurture negotiations. The dollar edged up 0.12% to 7.2381 Chinese yuan in offshore trading. It started Thursday on the front foot, a day after the Federal Open Market Committee (FOMC) warned of rising risks to the economy from higher inflation and unemployment, but left interest rates unchanged, as widely expected. Markets currently price three quarter-point rate cuts by year-end, with the next coming in July or September. Elsewhere, the Swedish and Norwegian crown were trading at 9.662 and 10.3576 per dollar, respectively, little changed after Sweden's Riksbank and Norway's Norges Bank held their rates as expected. (Reporting by Kevin Buckland, Linda Pasquini and Samuel Indyk; Editing by Sam Holmes, Emelia Sithole-Matarise and David Evans)
