Sterling set for biggest weekly rise in months against euro
FXB•Sterling was on track for a 0.87% weekly rise against the euro, its biggest gain in months, while heading for a third straight weekly drop against the dollar.
1. Sterling gains against euro
Sterling was on track for its biggest weekly rise against the euro in months as concerns about the fiscal outlook of some heavily indebted euro-area countries weighed on the single currency. The euro was up 0.05% at 85.23 pence on Friday and was set for a 0.87% weekly fall, its steepest since May.
2. Pound falls against dollar
The pound rose 0.09% to $1.3204 on Friday after touching $1.3181 on Thursday, its lowest level since June 25, but was on track for a third straight weekly drop against the dollar. The dollar strengthened after the Federal Reserve’s hawkish shift in mid-September. Traders were pricing in about 30 basis points of Bank of England tightening by year-end and around 90 basis points by the end of 2027.
3. EU ties in focus
Prime Minister Andy Burnham argued that the UK should again consider options including rejoining the EU, and investors will watch for signs of closer ties ahead of a UK-EU summit expected around November 20. Mizuho strategist Evelyne Gomez-Liechti said reports suggesting progress toward a broader UK-EU reset may modestly support sterling sentiment. Ebury’s Matthew Ryan said another referendum was fanciful and highly unlikely to happen.
