Sterling claws higher as dollar releases data-driven gains

Amanda Cooper
·2 min read
FILE PHOTO: Bank of England reveals design for new £20 note featuring Turner

By Amanda Cooper

LONDON (Reuters) - The pound edged up on Tuesday, as investors cashed in on a rally in the dollar, while UK data showed high interest rates and a gloomy economic outlook slowed activity in the British construction industry to a crawl in November.

Sterling neared its highest in six months against the dollar early on Monday. But data later in the day that showed U.S. service-sector activity expanded by more than expected in November rekindled expectations for rapid rate rises from the Federal Reserve and triggered the largest one-day gain in the dollar in two weeks.

By Tuesday, some stability returned to the UK currency and sterling was last up 0.3% against the dollar at $1.222, while against the euro, the pound eased 0.1% to 86.09 pence.

The S&P Global/CIPS UK Construction Purchasing Managers' Index (PMI) fell to a three-month low of 50.4 from 53.2 in October, barely above the 50 dividing line between growth and contraction.

A Reuters poll of economists had pointed to a reading of 52.0.

"Survey respondents noted that new residential building projects had been curtailed in response to rising interest rates, cancelled sales and worries about the economic outlook," said Tim Moore, economics director at S&P Global, which compiles the survey.

Next week, policymakers at the Bank of England, the European Central Bank and the Fed meet to discuss interest rates, so investors are positioning carefully ahead of that.

"With no more guidance from Fed officials due to the mandatory ‘blackout’ period ahead of the next Fed meeting, forthcoming data and technical levels will take center stage as the primary drivers for GBP/USD," Warren Venketas, an analyst at DailyFX, said.

The BoE has increased interest rates from 0.1% a year ago to 3% in November, and looks likely to raise them again by another half point this month.

The pound lagged particularly against the Australian dollar after the Reserve Bank of Australia raised interest rates to a 10-year high of 3.1% and indicated it expects to continue to increase borrowing costs to bring down inflation.

Sterling was last down 0.4% against the Aussie at A$1.8124, but was only a whisker below Monday's nine-month high.

(Reporting by Amanda Cooper; Editing by Bernadette Baum)

  • Up next
  • Up next
  • Up next
  • Up next

Latest Stories

  • UPDATE 1-BHP Group makes $38.8 bln play for Anglo American, copper in focus

    BHP Group said it made an offer to buy London-listed miner Anglo American, valuing its share capital at 31.1 billion pounds ($38.84 billion), a deal that would create the world's biggest copper miner with around 10% of global output. BHP, the world's largest listed miner, will offer Anglo American shareholders 25.08 pounds per share, including 4.86 pounds apiece in Anglo Platinum shares and 3.40 apiece in Kumba shares, it said in a statement on Thursday. Anglo American earlier in the day said it had received an unsolicited, non-binding and highly conditional combination proposal from BHP, which it was currently reviewing.

  • Do You Think Charles Schwab Corp (SCHW) is an “Ugly Duckling”?

    Blue Tower Asset Management, an asset management company, released its first quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 13.78% net in the first quarter exceeding the broad market index’s gain so far this year. In addition, please check the fund’s top five holdings to know its […]

  • Cardlytics Inc (CDLX) COO Amit Gupta Sells 23,416 Shares

    Cardlytics Inc (NASDAQ:CDLX), a company specializing in advertising platforms that leverage purchase intelligence to make marketing more relevant and measurable, has reported an insider sale according to a recent SEC filing.

  • Ukraine bans men of fighting age from applying for new passports

    Staying abroad does not relieve citizens of duties to homeland, says foreign minister

  • Chinese EV battery maker CATL unveils LFP battery with 1,000 km range

    Chinese electric vehicle (EV) battery maker CATL on Thursday unveiled a lithium iron phosphate (LFP) battery with a driving range of more than 1,000 kilometres (621 miles) on a single charge. The Shenxing Plus is the world's first LFP battery boasting such a range, Chief Technology Officer Gao Huan of CATL's e-car division said on the first media day of the Beijing auto show.

  • Ofsted to continue with single-phrase judgments despite calls to axe them

    The Department for Education’s response has been branded ‘deeply disappointing’ and a missed opportunity for ‘meaningful change’ by union leaders.

  • England tops global chart for child alcohol use – study

    In one of the largest studies of its kind, the World Health Organisation examined data for 280,000 children from 44 countries.

  • Sainsbury takes on Aldi and Lidl after "relentless" price cuts

    Sainsbury today hailed its focus on food under CEO Simon Roberts and said it is taking market share from rivals including Aldi and Lidl at the cheaper end of the market and Waitrose at the top. In a swipe at the German discount giants, it dubbed them “limited choice grocers” and said it was winning back customers from both Aldi and Lidl thanks to price matching promises.

  • UPDATE 1-Third man detained in bribery case surrounding Russian deputy defence minister

    A third man has been detained in a bribery investigation centring on Deputy Russian Defence Minister Timur Ivanov, the Moscow court service said on Thursday. It said Alexander Fomin, the co-founder of a construction company called Olimpsitistroy, was suspected of paying bribes to Ivanov, who was detained on Tuesday, and Sergei Borodin, a close associate of Ivanov who is also in custody. The scandal is the biggest in years to hit the defence ministry, and is seen as a severe blow to Defence Minister Sergei Shoigu.

  • FTSE 100 Live 25 April: Sainsbury's results; mining takeover plan revealed, shares seen steady

    Anglo American confirmed last night that it is considering an all-share offer by BHP but did not disclose the price on the table from its Sydney-based rival. It did reveal, however, that the proposal is first dependent on it completing separate demergers of its South Africa-listed platinum and iron ore operations to Anglo shareholders. “The premium offered by overseas buyers swooping on London-listed firms is seen as evidence that UK assets are still cheap, having been languishing as a result of the Brexit-effect and the sluggish performance of the UK economy.”

  • Wales school stabbing - latest: Teenage girl remains in custody after teachers and pupils stabbed

    Police and ambulance called out to Amman Valley School in Ammanford, Carmarthenshire

  • Thunder's Holmgren bests Pelicans' Valanciunas in center matchup to help OKC take 2-0 lead

    OKLAHOMA CITY (AP) — Thunder rookie Chet Holmgren won his center matchup with Jonas Valanciunas and helped Oklahoma City beat the New Orleans Pelicans 124-92 in Game 2 of their first-round playoff series Wednesday night. Holmgren had 26 points and seven rebounds as the Thunder took a 2-0 lead. He made 9 of 13 field goals to support Shai Gilgeous-Alexander's 33-point effort. “He was really good," Gilgeous-Alexander said. "He was in the actions, got out of them and then put their defense in a bind

  • Humza Yousaf to hold extra cabinet meeting

    The agenda is not known but it follows speculation about the future of the power-sharing deal with the Greens.

  • China's version of Neuralink unveiled at tech forum

    A Chinese state-backed company on Thursday unveiled a brain chip similar to the technology developed by Elon Musk's startup Neuralink. The company, Beijing Xinzhida Neurotechnology, developed a brain-computer interface (BCI) implant, called Neucyber, that has been tested on a monkey, allowing it control a robotic arm with only its thoughts, according to the state-run Xinhua news agency, which added that the technology was "independently developed" and China's first "high-performance invasive BCI". The controlling shareholder of Xinzhida Neurotechnology is the Beijing municipal government's state asset regulator, according to corporate database Qichacha.

  • Blades of Paris's famous Moulin Rouge windmill collapse onto street

    The blades of the world-famous Moulin Rouge in Paris have collapsed overnight. The sails of the landmark red windmill on top of France’ most famous cabaret club fell to the ground in the early hours of Thursday, a venue spokesperson said. Paris firefighters confirmed on Thursday that the collapse on the busy Boulevard de Clichy did not cause any injuries.

  • Rishi Sunak's Tories don't have path to victory at general election in July or earlier, says political expert

    Professor Sir John Curtice believes if the Conservatives went for a snap summer poll they would suffer the same fate as Harold Wilson in 1970

  • Meta earnings results: shares tumble 17% after hours despite beating estimates; stock down on weak revenue guidance

    Meta's stock sank after hours. Share prices were down 17% after Facebook's parent company issued weak revenue guidance on today's earnings call.

  • Venice launches pilot day-tripper entry fee to tackle mass tourism

    Under the gaze of the world’s media, the fragile lagoon city of Venice launches a pilot program Thursday to charge day-trippers a 5-euro (around $5.35) entry fee that authorities hope will discourage visitors from arriving on peak days and make the city more livable for its dwindling residents. Signs advising arriving visitors of the new requirement for a test phase of 29 days through July have been erected outside the main train station and other points of arrival.Some 200 stewards have been tr

  • Teens charged with terrorism offences; warning over opioid overdoses; and a new cast for a zombie classic

    Police said a further five people, including two men and three juvenile males, assisted police with their inquiries

  • German economic weakness spurs angst in neighbouring countries

    Germany's economic weakness is causing concern in neighbouring countries from Switzerland to Poland, prompting some foreign economists to call for reforms in the euro zone's largest economy to stop the spread of the malaise. The International Monetary Fund cut its forecasts for German GDP growth by 0.3% for both 2024 and 2025. "Without economic stimulus from Germany, Austria will struggle," said Gabriel Felbermayr, director of the Austrian Institute of Economic Research Wifo.