Pound dips as worries over UK borrowing costs mount
Sterling fell against the dollar while some confidence returned to the greenback after an up-and-down few weeks.
Data on Friday showed UK government borrowing was higher than expected last month, another potential issue for chancellor Rachel Reeves ahead of her spring statement next week.
Confidence in the dollar has also been on shaky ground amid erratic policy moves by president Donald Trump in terms of global trade and tariffs.
The pound traded above the $1.29 mark on Friday. Earlier in the week it had rallied as high as $1.30, a four month high.
The dollar index (DX-Y.NYB), which track’s the world’s reserve currency against a basket of other currencies, ticked up slightly in early trade.
“The US dollar continues to rally off oversold levels,” said David Morrison, senior market analyst at Financial Conduct Authority-regulated fintech and financial services provider Trade Nation.
“The Dollar Index is pushed up towards 104.00, and it will be interesting to see if it has the legs to retest and break back above resistance just south of 105.00 in the coming weeks. If not, then bearish dollar sentiment could return again.”
As of 13:27:33 GMT. Market open.
As of 13:28:06 GMT. Market open.
Currency traders will also be watching the moves of central banks. Both the US Federal Reserve and the Bank of England opted to hold interest rates this week. Markets are pricing in two more cuts this year by the Fed.
Sterling also fell against the euro, waning 0.1% to trade around the 1.19 mark.
Gold futures prices were hovering just below a flatline on Friday at around $3,042 per ounce, as the yellow metal retreated from previous highs.
Price declines were partly due to a firmer dollar, and profit taking following all-time highs of $3,057 on Thursday. A firm dollar makes gold more expensive for overseas buyers.
Spot prices also fell 0.3%, to the $3,035 mark by midday in London.
As of 9:18:10 GMT-4. Market open.
Oil prices came off three-week highs on Friday, slipping as worries continue around Iran-related sanctions.
Brent was down 0.2% by lunchtime to trade around the $71.30 a barrel mark, while West Texas Intermediate dipped 0.1%, hitting $68 a barrel.
Earlier in the week, US government data revealed a larger-than-expected drop in distillate inventories, including diesel and heating oil, which fell by 2.8 million barrels last week.
“US oil demand outlook remains healthy despite lower air travel passenger volumes,” JPMorgan (JPM) analysts said in a note. They added that reduced travel activity in the US did not indicate a broader weakness in demand. Global oil demand averaged 101.8 million barrels per day (bpd), marking an annual increase of 1.5 million bpd, according to the bank.
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