The sterling gained ground against both the U.S dollar and the euro on Thursday as investors’ focus remained firmly on the global economy and its effects on the U.S. Federal Reserve’s upcoming interest rates decisions.
At midday, the British pound was up 0.42% against the U.S. dollar at $1.1887 as well as 0.1% higher against the euro, with one euro costing 88.892 pence. This marginal hike was not enough to erase the pound’s weekly loss against the dollar, with the British currency still 1.3% down against the greenback.
“It has been a big week for the dollar and U.S. interest rates, that is the dominant story this week. We had Powell’s testimony on Tuesday and Wednesday and U.S. jobs data tomorrow,” ING strategist Chris Turner reflected.
The market has determined that there is a 91% chance that the Federal Reserve will implement a 25-basis point rate hike once the Bank of England meets for its next policy meeting on March 23.