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Sterling set for second week of decline against dollar

Sterling set for second week of decline against dollar
Sterling set for second week of decline against dollar   -   Copyright  Thomson Reuters 2021
By Reuters

By Ritvik Carvalho

LONDON – Sterling dipped to two-week lows against the dollar on Friday, putting it on track for a second week of decline as investors looked for fresh catalysts after Britain’s growth figures for the second quarter came in as expected.

As of Aug 12, the pound is the third best-performing G10 currency, trailing the Canadian dollar and the U.S. dollar.

Recent moves have been attributed largely to shifts in risk sentiment and moves in the dollar, although sterling has outperformed as COVID-19 cases have fallen and high vaccination rates allowed the British government to lift most restrictions.

Thursday’s GDP figures, which came in line with expectations added to signs Britain’s economy is on a path to recovery. But with the data not materially disappointing to the downside or surprising to the upside, investors sold the news.

On Friday, sterling dipped to its lowest levels since July 27, down 0.15% against the dollar at 0838 GMT to $1.3790. That put it on track for a 0.5% decline on the week.

Against the euro, it traded 0.2% lower at a week’s low of 85.12 pence.

“This morning’s decline … appears to be a continuation of the modest dollar bull trend that appears to have embedded itself as a result of the market pricing a sooner than expected taper from the Fed,” Michael Brown, senior market analyst at Caxton FX, said.