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Sterling Steadies After A Few Volatile Days

• Posted by Shyam Gokani in Uncategorised
• January 19, 2017
• No Comments

The pound steadied this morning after a few days in which uncertainty about Brexit has seen both its biggest rise in decades against the dollar and two of its heaviest slumps in months.

Sterling climbed back above $1.2320, having been knocked as low $1.2254 overnight by a dollar rally after Federal Reserve head Janet Yellen highlighted the likelihood that U.S. interest rates will go up for the next few years.

The pound also climbed against the euro, as traders waited to hear from President Mario Draghi at the European Central Bank’s first meeting of the year.

With the start of Britain’s negotiations to leave the European Union due to start by the end of March, the pound is set to remain highly sensitive to the talks and to data.

Britain’s prime minister and finance minister also spoke at a gathering the World Economic Forum’s meeting in Davos, Switzerland, repeating that the UK wanted “ambitious” post-Brexit trade deals and that it would allow firms time to adjust to the new setup.

New data, however, showed that Britain’s housing market had its weakest month since just after June’s Brexit vote in December.

Two of Europe’s biggest banks, HSBC and UBS, also warned on Wednesday that they could each move about 1,000 jobs out of London, while U.S. investment bank Goldman Sachs had similar plans.

Quite day for Sterling in terms of economic data, the main event for the day is the ECB press conference at 13:30 GMT.