FX Roundup: Pound higher as BoE policymakers prepare to meet

The pound sterling rose against a basket of currencies on Monday, with the Bank of England’s Monetary Policy Committee preparing to meet later this week, while the euro registered gains against the dollar.

At 1510 BST, the pound was up 0.05% and 0.17% against the dollar and yen changing hands at $1.5436 and JPY186.42 respectively, while maintaining broadly flat levels against the euro and Swiss franc.

Jane Foley, senior FX strategist at Rabobank, said, “Net sterling positions lost some ground though they stayed in positive territory. The market is looking ahead to the BoE’s 5 November Quarterly Inflation Report to throw light on the timing of the first rate hike of the cycle.”

Elsewhere, the euro strengthened against the dollar fetching $1.1031, up 0.23%. Meanwhile the greenback continued losing ground to the yen (down 0.07%) and Swiss franc (down 0.28%).

Commodities-linked currencies got respite as the New Zealand dollar rose 0.07% against the greenback to change hands at US$0.6759, while the Australian dollar rose 0.11% changing hands at US$0.7146. However, the greenback was broadly flat against the Canadian dollar changing hands at CAD$1.3084.

Kit Juckes, head of forex at Societe Generale, said, “November is starting with far more focus on emerging markets than on G10 currencies (or bonds). The worst of the G20 currencies this morning is the New Zealand dollar, which is probably just suffering from a hangover.

“China's manufacturing PMI remains sub-50 (official PMI at 49.8, Caixin at 48.3) and the non-manufacturing PMI dipped to 53.1 from 53.4. That has helped give Asian equity markets a soggy feel, taking Treasury yields a little lower and the dollar has drifted off slightly. The moves are small however.”

In the Americas, the dollar traded higher against the Brazilian real (up 0.18%) and Chilean peso (up 0.14%) but fell against the Mexican peso (down 0.13%) and Colombian peso (down 0.11%).

Finally, the Turkish lira rose considerably against the dollar, with the latter fetching TRY2.8301, or 2.91% less, during early trading on Monday morning after a surprise win for the AK party. However, the party is expected to fall just short of a majority.