The pound headed for a weekly gain versus the euro as reports strengthened speculation that the U.K. economy is recovering fast enough to withstand tighter monetary policy while European economies require more stimulus.
U.K. inflation accelerated last month toward the Bank of England’s 2 percent target while price increases in the euro area were less than half the European Central Bank’s goal, reports showed this week. Sterling fell for a third day against the dollar. Government bonds were little changed as waning concern that the shooting down of an airliner yesterday would escalate the Ukraine crisis damped demand for haven assets.
“The U.K. is just coasting toward monetary tightening, things are going very well,” said Neil Mellor, a currency strategist at Bank of New York Mellon in London. “There are only so many yield plays available and the pound by virtue of its fundamentals is one of them. The obvious one to buy it against is the euro.”
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Latest posts by marketpulsefxstaff (see all)
- Oil Remains Near Multi-Month Lows - 6 August 2015
- U.S. Dollar Higher on Recent Data - 6 August 2015
- Greece’s PM Tsipras: Loan Deal with Lenders Close - 6 August 2015