LONDON, Jan 12 — Sterling made marginal gains today against the dollar and the euro, as attention remained on US inflation data due later in the session for clues on future rate hikes in the world’s largest economy.
The pound was up 0.18 per cent to US$1.21650 (RM5.31) and was 0.11 per cent higher against the euro, trading at 88.430 pence.
Britain’s murky economic backdrop remains in focus for traders, with a survey today showing its construction sector stagnated at the end of last year, with home-building particularly hard hit in the face of rising borrowing costs.
After dropping 10.6 per cent versus the dollar in 2022, the pound is clinging to a 0.5 per cent gain year-to-date.
“A lack of optimism surrounding the outlook (could) keep GBP soft for now,” Mizuho senior economist Colin Asher said in a note. He forecasts the pound will reach US$1.31 versus the dollar by the fourth quarter of 2023.
The BoE has hiked interest rates nine times since December 2021 in an attempt to lower inflation that remains near a 41-year high, while attempting to avoid a deep recession.
Yesterday, the pound fell to its lowest level since late September against a surging euro, which hit a seven-month peak amid hawkish messaging from European Central Bank officials.
Currency traders are looking to US inflation data due for release today at 1330 GMT. It could give markets a glimpse into whether the Federal Reserve will slow the pace of rate hikes. — Reuters
