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The UK currency rose 0.2% to 1.2596, the last view on 30 December at one level. It has gained more than 4% lead in the previous month, which has increased to $ 1.21 from a tumble in January. It had changed slightly against the Euro.
After the latest announcement on US President Donald Trump’s trade tariff, most of the major currencies on Friday strengthened, which promotes optimism that it would take longer than expected to implement them. Most of the conditions in the market are betting that the UK will not be targeted at all.
“Pound may have raised a little support as American data suggests that there is a trade surplus with the US,” Jane Foley, said Jane Fole, head of the G10FX strategy in Robobank. However, he said that development would require a concrete recovery in development to maintain a rally.
Traders have covered the small stakes that they made when there were concerns about the cost of borrowing UK. The data released on Thursday made a slight increase in the economy at the end of last year, while traders have reduced their predictions on interest rate cuts this year.
“Sterling is going to continue to perform well,” said Els Cotney, head of international rates at Wangard Asset Management. “If we hope that the Federal Reserve will be on hold this year, it is difficult to see Bank of England cutting one and three times one and three times.”
Option traders are still slowing down on the pounds, but the conviction is reduced. The premium of selling the UK currency vs. dollars compressed by about 30 basis points this week and a month’s volatility in the pound-dollar pair has fallen to its lowest level since December 19.
Nevertheless, some in the market predicted that the rally could soon be sputter. TJM Managing Director Neil Jones in Europe warned that the small covering rally could hit a wall when technical resistance reaches 1.2680, the pair’s 100-day moving average.
“Once there is a small shortage and the market has gone into the flat, the pound rally is over,” Jones said.
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