* Sterling up 0.2 percent after 2 cent fall last week
* Weekend polls confirm tightening election race
* Dollar helped by data, Fed's Williams
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, May 29 Britain's pound was the only
substantive mover among major currencies on Monday, recovering
some ground after weekend polls showed Prime Minister Theresa
May is set to win next week's elections even if the scale of
victory is in question.
Sterling had its worst day since early February on Friday,
and was down almost 2 cents last week as polls showed May's lead
over the opposition Labour Party had shrunk from as much as 20
points last month to as low as 5 in one poll.
More surveys over the weekend confirmed the trend but also
that May's Conservatives still lead solidly and should win -
just potentially not by the landslide she had targetted when
calling the election six weeks ago.
With London markets closed for a holiday, the pound inched
up 0.2 percent in thin morning trade in Europe, trading at
$1.2825 and 87.13 pence per euro respectively.
The dollar, which also struggled last week in the face of
receding expectations for a major boost for growth from the
Trump administration, was steady at $1.1175 per euro and
"A lot of what we are seeing is the after effects of
Friday's news and data releases," said Thu Lan Nguyen, a
currency strategist with Commerzbank in Frankfurt.
"We have a little bit of dollar strength following better
U.S. data and some hawkish comments from Federal Reserve
officials. And we have a little bit of a pound recovery
following the latest poll results from the UK."
The dollar index, which tracks the U.S. currency against a
basket of six major rivals, was broadly flat at 97.406,
holding well above last week's nadir of 96.797, its lowest since
San Francisco Federal Reserve President John Williams said
in Singapore on Monday that medium-term trends in U.S. inflation
remained "pretty favourable," despite some recent soft consumer
The U.S. economy was at or near the Federal Reserve's goals
of full employment and stable prices, Williams said, adding that
the U.S. central bank wanted to ensure markets stayed calm as
the Fed slowly returned interest-rate policy to normal.
Data on Friday indicated the U.S. economy was modestly
expanding, solidifying expectations for a rise in official
interest rates next month and adding to the case for the Fed to
begin paring its $4.5 trillion balance sheet.
Gross domestic product grew at an annual 1.2 percent in the
first quarter, faster than the 0.7 percent reported last month,
though softening business investment and moderate consumer
spending might impede an acceleration in the second quarter.
"Friday’s batch of US data is weighing on the euro as it
strengthens the case a recent slowdown in US data may in fact
have been transitory in nature ," said LMAX Exchange analyst
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Editing by Toby Chopra)