The pound rose versus the dollar, extending a gain from the end of last week, as a gauge of retail sales exceeded analysts’ forecasts and trading patterns suggested the U.K. currency was due to halt its downward trend.
Sterling is poised to rally versus the U.S. currency after forming a chart pattern called an inverted head and shoulders, according to Brown Brothers Harriman & Co. The pound has declined more than 6 percent since reaching a five-year high in July. U.K. government bonds rose before the Debt Management Office sells gilts due in 2068 via banks this week. Bank of England policy maker Nemat Shafik is scheduled to speak in London today.
“The pound is going to lift over the course of the week given opportunities for fairly normal trading conditions,” said Harry Adams, the head of trading at Argentex LLP, a currency advisory company in London. The decline since July “is a big move. It could be a question of it being too far, too fast, so there will be a little bit of a relief rally, up to mid-$1.63.”
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