Reuters logo
Sterling hovers below 7-month highs before construction data
May 3, 2017 / 7:52 AM / 7 months ago

Sterling hovers below 7-month highs before construction data

* Graphic: Sterling and gilt yields

* Graphic: World FX rates in 2017

* Graphic: Trade-weighted sterling since Brexit vote

By Ritvik Carvalho

LONDON, May 3 (Reuters) - Sterling dipped against the dollar on Wednesday, but stayed close its highest levels in seven months as investors awaited a construction activity survey for further cues to the UK economy’s health as Britain’s European Union exit talks loom.

Tuesday’s stronger-than-expected survey of the manufacturing sector gave the pound some buoyancy in the face of headlines that suggested Britain’s negotiations to leave the EU would be difficult.

Sterling lost some of that bounce on Wednesday, with the pound down marginally at $1.2930, but not far from a seven-month high of $1.2965 hit on the last trading day of April.

It was up less than 0.1 percent at 84.41 pence per euro.

More rumblings surrounding the size of Britain’s EU exit bill emerged, adding some pressure on the currency.

Brexit minister David Davis said on Wednesday that Britain would not pay 100 billion euros to leave the European Union, after the Financial Times reported that the bloc was preparing to demand that amount.

This came a day after British Prime Minister Theresa May promised EU officials she would be “a bloody difficult woman” in the talks, after being accused of underestimating the complexity of Brexit negotiations and having “illusions” over a deal.

“In our view, no side entering into protracted, difficult negotiations will open up by suggesting that the other side is being utterly reasonable and all of their demands will be met with acquiescence,” Nomura strategists wrote in a note to clients on the subject of the Brexit bill.

“The pound looks to be following suit and has had limited drawdowns thus far, adding conviction to our view that the political Brexit timeline may provide ‘flashpoints’ as today’s news suggests, but the market seems to be taking them on the chin and they are largely priced in.”

A Reuters poll of economists put the Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) for April at 52, versus its prior reading of 52.2 for March.

The numbers for April are due at 0830 GMT. (Reporting by Ritvik Carvalho; Editing by Andrew Heavens)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below