Economic news

Pound hovers near two-week low amid rising doubts on May rate hike

The pound sank to a two-week trough versus the dollar on Monday as traders wondered whether the central bank would increase interest rates in May after weak economic figures and cautious governor Mark Carney's statements.

Photo: Reuters

The British currency traded at $1.3997, after earlier touching a 2-1/2 week nadir of $1.3984, as broad greenback firmness kept sterling under pressure. Versus the euro, sterling rebounded 0.3 percent to 87.515 pence.

Sterling has been among the best performing major currencies in 2018 and last week soared to its top level since the Brexit vote in June 2016.

But weak salary growth and inflation, and statements by Carney that the figures were “mixed” affected the currency toughly, pushing it down about 1.7 percent for the week as traders hurried to price in the opportunity the BoE could detain increasing rates until later in the year.

Analysts on Monday said they would await GDP preliminary data due later in the week to assess the economy's state.

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