Sterling holds its own against stronger dollar, trade optimism lends supports
By Lucy Raitano and Johann M Cherian
LONDON (Reuters) -Sterling ticked higher against the dollar on Thursday, one of the few major currencies to hold its own against the greenback which regained ground after weak U.S. data dragged it lower on Wednesday.
The pound was up 0.14% at $1.3574, while against the euro it was up 0.1% at 84.16 pence.
Sterling remains a touch away from a more than three-year high hit on May 26, underpinned by ongoing dollar weakness with the pound up over 8% this year.
Also helping is the fact the UK is the only country to have struck a trade deal with the U.S and was spared from higher U.S. steel and aluminium tariffs, though analysts question how beneficial those factors are.
"The trade deal does matter," said Chris Beauchamp, chief market analyst at IG Group.
"You might argue it's not a proper trade deal and that it doesn't solve all the problems, but at least it's a sign that there's a more compelling reason to hold the pound rather than be worrying about the euro," Beauchamp added.
The Bank of England (BoE) will meet on June 19 to deliver its next policy decision with market bets firmly on the monetary policy committee (MPC) keeping rates steady.
There had been expectations of a further 25 bps cut from the BoE at its June meeting but bets were slashed following weak economic data and a hotter-than-expected inflation read last month.
On Tuesday, Bank of England Governor Andrew Bailey said he was sticking with a "gradual and careful" approach to cutting interest rates as global trade policy turmoil increasingly clouds the outlook.
Reassurance came on Wednesday with a survey showing Britain's services sector returned to tepid growth last month.
(Reporting by Lucy Raitano and Johann M Cherian, Editing by Ed Osmond)
