Economic news

Sterling Holds near Three-Week High ahead of U.S. Jobs Data

LONDON - Sterling hovered just below a three-week high on Friday morning as markets braced for a jobs report in the United States which is expected to drive the Federal Reserve’s asset purchase policy, which will in turn impact the dollar.

The pound has seen listless trading this week in the absence of major British economic data or policymaker speeches, hovering at around the $1.38 level.

U.S. employment growth likely pulled back in August amid a resurgence of COVID-19 cases, a Reuters survey of economists showed, but should remain robust enough for the Fed to hold to its plan to begin tapering asset purchases this year.

The dollar’s direction is in limbo as financial markets await a clearer path from the Fed, according to a Reuters poll of FX strategists who were split on where they expected the currency to trade over the next three months.

At 0800 GMT the pound was flat against the dollar at $1.3826, near a three-week high of $1.3839 seen on Aug. 17.

The speed of Britain’s COVID-19 vaccination programme had contributed to the pound being the best performer among G10 currencies this year, but it has since lost that crown amid some troubling data in the economic outlook.

Those included slowing credit card spending, fewer positive data surprises and rising virus cases among the elderly, analysts at Nomura said.

Reporting by Lawrence White, Editing by William Maclean

Source: Reuters

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