The pound weakened for the first time in five days against the euro
before data that economists forecast will show an improvement in the
U.K. labor market.
Sterling held a three-day gain versus the dollar as investors awaited
the Bank of England’s quarterly Inflation Report and the first
questions to BOE policy makers since they entered an election-campaign
purdah six weeks ago.
In this period, data has been mixed with slower economic growth in the first quarter than analysts estimated, while industrial production unexpectedly increased.
The U.K. currency surged to the highest level this year against the dollar on Tuesday as volatility dropped since the Conservative Party secured an outright majority in Britain’s May 7 election.
“The majority government result has clearly surprised the market but it is worth bearing in mind that against the dollar, the pound is riding the crest of the broad greenback weakness wave higher,” said Lee McDarby, executive director of U.K. corporate foreign-exchange sales at Nomura International Plc in London.
“With recent disappointing growth figures we feel that the Monetary Policy Committee will not be able to send too hawkish a message.”
The pound weakened 0.2 percent to 71.70 pence per euro as of 8:43 a.m. London time, having strengthened 4 percent over the previous four days. Sterling was little changed at $1.5684, after touching $1.5711 on Tuesday, the highest since Dec. 17.
In this period, data has been mixed with slower economic growth in the first quarter than analysts estimated, while industrial production unexpectedly increased.
The U.K. currency surged to the highest level this year against the dollar on Tuesday as volatility dropped since the Conservative Party secured an outright majority in Britain’s May 7 election.
“The majority government result has clearly surprised the market but it is worth bearing in mind that against the dollar, the pound is riding the crest of the broad greenback weakness wave higher,” said Lee McDarby, executive director of U.K. corporate foreign-exchange sales at Nomura International Plc in London.
“With recent disappointing growth figures we feel that the Monetary Policy Committee will not be able to send too hawkish a message.”
The pound weakened 0.2 percent to 71.70 pence per euro as of 8:43 a.m. London time, having strengthened 4 percent over the previous four days. Sterling was little changed at $1.5684, after touching $1.5711 on Tuesday, the highest since Dec. 17.
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