Sterling at 2-week highs vs broadly weaker dollar

Monday,   23-May-2022   03:22 PM (IST)

The pound rallied on Monday, persisting at more than two-week highs against a broadly weaker dollar, as traders await key data on the UK’s manufacturing industry this week. By 0836 GMT sterling was up 0.46% against the dollar at $1.25530, its highest level since May 5. The strength of the pound is largely down to broad dollar weakness, as investors sold the U.S. unit on hopes that loosening lockdowns in China could help global growth. Strong labour numbers early last week had reinforced expectations that the BoE will need to continue raising interest rates to fight high inflation. Data on Friday showed British retail sales jumping unexpectedly in April. But expectations were tempered days later when inflation hit a 40-year high, raising concerns over how far the BoE will be able to hike rates without precipitating an economic downturn. The BoE has raised interest rates four times since December - more than any other major central bank.