Sterling set for 2nd biggest weekly rise in 2018

  • Friday 14, September 2018 in 7:03 PM
Sharjah 24 – Reuters: Sterling rose on Friday and is set for its second biggest weekly rise in 2018 as imminent concerns over the outlook of emerging markets faded after Turkey's sharp rate hike and after the central bank upgraded growth forecasts at a policy meeting.
Apart from news over the progress of Brexit negotiations, the British currency has become increasingly correlated to risk appetite in recent weeks and concerns over a widening emerging market currency selloff has also weighed on sterling.
 
On Friday, sterling rose 0.2 percent to $1.3139 to its highest level since Aug. 1. On a weekly basis, it is up more than 1.5 percent, its biggest weekly rise so far this year.
 
The BoE voted 9-0 to leave interest rates at 0.75 percent, a month after tightening policy for only the second time since the 2009 financial crisis and upgraded its forecast for third-quarter GDP growth, to 0.5 percent from 0.4 percent.
 
An interest rate rise by Turkey's central bank to support a tumbling lira boosted risk appetite in emerging markets.
 
The bank raising its benchmark interest rate by 625 basis points to 24 percent sent an index tracking emerging market currencies to near three-week highs on Friday.