Sterling falls more than 1 percent against resurgent dollar
Mon Nov 07 2016
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Sterling falls more than 1 percent against resurgent dollar

LONDON : Sterling fell more than 1 percent on Monday against a resurgent dollar, which rebounded on news that Hillary Clinton would not face criminal charges over her private e-mail server, boosting her chances on the eve of the U.S. presidential vote.

The pound was down 1.04 percent to $ 1.2390, reversing its best weekly gains since 2009 against the greenback on Friday when worries eased that Britain would undergo a “hard” exit from the European Union and lose its access to the single market.

“There are two sides to this story; there’s the dollar politics and sterling politics,” Rabobank senior strategist Jane Foley said.

“If there still is the perception that the UK may after all be faced with a ‘soft’ Brexit, then sterling should find some support but the outcome of the U.S. election is clearly dominant now.”

Politics have dominated sterling moves recently, overshadowing economic data that indicated strong growth in the UK services sectors despite Brexit concerns.

“In a quiet data week for the UK, the main release will be September IP data,” said RBC Capital Markets strategist Elsa Lignos in a note.

“A reasonably large shock would be needed to influence the initial estimate of Q3 GDP, so in all likelihood we’ll have to wait for CPI data a week later for more interesting developments.”

Against the euro, the pound fell 0.2 percent to 89.18 pence after rising 1.5 percent the week before.

Despite last week’s rebound, sterling has still fallen against the dollar since the EU referendum and thus far failed to reach the $ 1.26 mark that technical analysts said would suggest a sustained recovery.

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