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Forex - Sterling slips as dollar regains ground

Published 03/30/2015, 05:17 AM
Updated 03/30/2015, 05:17 AM
Pound slips lower against firmer dollar

Pound slips lower against firmer dollar

Investing.com - The pound slipped lower against the dollar on Monday as the greenback firmed up after Federal Reserve Chair Janet Yellen reiterated Friday that the bank is likely to start raising interest rates later this year.

GBP/USD hit session lows of 1.4849 and was last down 0.31% to 1.4845.

In a speech on Friday, Ms. Yellen said a rate hike may be warranted later this year, but added that weakening inflation pressures could force the Fed to delay.

The Fed chief said policy tightening could "speed up, slow down, pause, or even reverse course" depending on how the economy is performing.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.30% to 97.91. The index slid 0.66% last week, the second consecutive weekly decline.

Sterling had moved higher against the dollar on Friday as uncertainty over the U.S. monetary policy path weighed after the Fed statement, released on March 18, indicated that it could raise interest rates more gradually than markets were expecting.

The pound received an additional boost after Bank of England Governor Mark Carney said the next move in interest rates is going to be up. The remarks came during a panel discussion at a Bundesbank conference in Frankfurt.

In the U.K., data on Monday showed that net lending to individuals and households rose broadly in line with expectations in February, reflecting improving demand for credit.

The BoE said total net lending to individuals increased by ₤2.5 billion last month, meeting forecasts and up from ₤2.4 billion in January.

In another report, the central bank said U.K. mortgage approvals rose to a six-month high last month, indicating that the housing market is picking up.

Mortgage approvals rose to 61,760 in February, up from 60,707 in January and ahead of forecasts of 61,500.

Elsewhere, sterling was little changed against the euro, with EUR/GBP at 0.7316.

The single currency was hit by fresh uncertainty over Greece’s bailout extension. Talks between Athens and its creditors over its economic reform proposals were due to resume in Brussels later in the day.

EUR/USD was down 0.25% to 1.0862, off Friday’s highs of 1.0947.

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