While stocks are enjoying a good week, sterling dipped to two-week lows against the dollar today, putting it on course for a second week of decline. But it’s still the third-best-performing G-10 currency, behind the Canadian dollar and the US dollar, according to Refinitiv.
Yesterday’s GDP figures were in line with expectations, and showed the UK economy returned to growth in the second quarter of the year. The economy expanded by 4.8%, as the lockdown measures introduced to fight the Covid-19 pandemic were relaxed.
The pound slipped 0.15% against the dollar at one stage this morning to $1.3790. Against the euro, it fell 0.2% to a week’s low of 85.12p.
Michael Brown, senior market analyst at Caxton FX, says: “This morning’s decline… appears to be a continuation of the modest dollar bull trend that appears to have embedded itself as a result of the market pricing a sooner than expected taper [of the bond-buying programme] from the Fed.”