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Sterling holds gains vs. dollar after risk-led rebound

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By Reuters
Sterling holds gains vs. dollar after risk-led rebound
Sterling holds gains vs. dollar after risk-led rebound   -   Copyright  Thomson Reuters 2021

By Ritvik Carvalho

LONDON -Sterling traded flat against the dollar on Tuesday, holding most gains made against the greenback on the back of a risk rebound at the start of the week that saw the British currency bounce nearly 1%.

The pound has traded roughly in line with risk sentiment in global markets, and a recovery in world stock markets on Monday helped give it a leg up after a nearly 2% loss last week – its worst in two months.

By 1530 GMT on Tuesday, sterling was flat against the dollar at $1.3723, holding on to its Monday bounce.

Against the euro, it was also flat at 85.59 pence.

“I think we’re now looking to Powell’s Jackson Hole speech on Friday for the market’s next impetus, though expectations for a hawkish shift do appear to have been dialled back over the last few sessions,” said Michael Brown, senior market analyst at Caxton FX.

Speculators reduced their net long position on the pound in the week up to last Tuesday, CFTC data showed on Friday. This means that speculators are less bullish on the currency than they were earlier. [CFTC/] [IMM/FX]

On Monday, survey data published showing Britain’s post-lockdown economic rebound slowed sharply in August, as companies struggled with unprecedented shortages of staff and materials.

The IHS Markit/CIPS flash composite PMI dropped for the third month in a row, sliding to 55.3 from 59.2 in July – a sharper slowdown than economists had forecast.