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Sterling steady in thin August trading

Marshall Gittler, head of investment research at BDSwiss Group, said weaker data could make "further loosening more likely" by the Bank of England. Coronavirus cases are rising in some parts of the world, which has prompted the British government to impose quarantine on many tourists returning from holidays.

Reuters | Washington DC | Updated: 14-08-2020 14:36 IST | Created: 14-08-2020 14:24 IST
Sterling steady in thin August trading
Representative image Image Credit: Pixabay

The pound was steady on Friday as thin August trading kept investors on the sidelines.

Sterling was last flat at $1.3067 and at 90.35 pence against the euro. It has risen nearly 7% in the last three months against the U.S. dollar, almost exclusively on the back of the greenback weakening. "It's summer markets, nothing is going to happen, it's all about the bond market at the moment," said Kenneth Broux, head of corporate research at Societe Generale.

Borrowing costs in Europe have tracked U.S. Treasuries this week, which have been driven to new highs by a deluge of debt issuance in the United States. Next week, Britain releases inflation data on Wednesday and retail sales on Friday, with both expected to be lower. Marshall Gittler, head of investment research at BDSwiss Group, said weaker data could make "further loosening more likely" by the Bank of England.

Coronavirus cases are rising in some parts of the world, which has prompted the British government to impose quarantine on many tourists returning from holidays. Late on Thursday, it announced that it would require arrivals from France, the Netherlands and Malta to quarantine from 0300 GMT on Saturday because infection rates there were too high, dealing a new blow to the travel industry.

The UK can ill afford another coronavirus-induced slump after posting a 20% drop in second-quarter GDP. In October it is due to end a furlough scheme that has allowed millions to retain their jobs. Prime Minister Boris Johnson has ordered the reopening of the economy in England to resume, saying a rise in infections that prompted caution two weeks ago had now levelled off, and warned of harsher punishment for those who breach the remaining restrictions.


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