The pound is near a one-month high


Wads of British pound sterling banknotes are stacked at the headquarters of the company Money Service Austria in Vienna, Austria November 16, 2017. REUTERS/Leonhard Foeger

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LONDON, May 30 (Reuters) – The pound rose on Monday against a faltering U.S. dollar and was poised to post its first monthly gain in five as the risk-sensitive currency benefited from improved sentiment.

As markets readjusted expectations of Federal Reserve rate hikes lower, the dollar index weakened more than 3.5% from its peak in mid-May. This helped push the pound higher after it hit its lowest level since March 2020 earlier this month.

“GBPUSD’s rebound largely reflects the depreciation of USD,” said Vasileios Gkionakis, EMEA head of CitiFX G10 strategy, which remains bearish on the pound against the euro and commodity exchange. raw, citing weakening growth, depleted household savings, lack of meaningful fiscal stimulus and a likely re-emergence of headlines related to the Northern Ireland Protocol.

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The trading range was relatively narrow until Monday, with US stock and bond markets closed for the Memorial Day holiday, while the UK calendar looks light this week with markets closed Thursday and Friday for the holiday. Spring and the Queen’s Platinum Jubilee.

As of 13:58 GMT, the pound was up 0.1% against the dollar at $1.2640, just off Friday’s monthly high of $1.26665.

Against the euro, the pound fell 0.2% to 85.15 pence.

Despite the pound’s recent rally against the dollar, data released by the Commodity Futures Trading Commission (CFTC) on Friday showed investors had slightly increased their net short position in the pound over the past week.

The net short position now stands at $6.3 billion, the largest short position since 2019.


Analysts are increasingly bearish on the pound given signs of a weakening economy and as the Bank of England continues to raise interest rates in an attempt to bring down inflation.

“Raising rates in the face of a sharply slowing economy is never a good idea for a currency,” Bank of America FX strategist Kamal Sharma said in a research note.

“A mitigation of the current environmental risk and fiscal stimulus may provide some relief, but the damage has been done and the outlook for the pound looks bleak,” Sharma added.

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Reporting by Samuel Indyk; Editing by Toby Chopra and Alison Williams

Our standards: The Thomson Reuters Trust Principles.


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