5 July 2004, 12:04  Sterling flexes muscles against data - hit dollar

Sterling pushed to a two-week high against the dollar on Monday as the U.S. currency continued to suffer in the wake of last week's weaker than expected U.S. jobs report. Data on Friday showed the U.S. economy generated less than half the number of jobs expected by analysts in June. The data raised concerns the U.S. recovery could be losing speed and knocked the dollar across the board. "The market is still digesting the U.S. jobs numbers from Friday and wondering how bearish to get on the dollar," said Steven Pearson, chief currency strategist at Halifax Bank of Scotland. The pound extended gains to $1.8364 in early trade -- its highest since June 21 -- before paring gains to $1.8328 by 0750 GMT. The British currency was also a touch firmer against the euro at 67.14 pence , recovering from six-week lows hit at the end of last week. Trade was relatively thin with U.S. financial markets closed on Monday for the Independence Day holiday. With little in the way of economic data, the Bank of England's monthly policy meeting looked set to be the main focus for sterling this week. Economist expect Britain's central bank to leave interest rates steady on Thursday after raising rates four times and by a cumulative one percentage point since November.///

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