Sterling traded close to a three-month high against dollar
The British sterling held firm close to a three-month high versus the dollar on Friday on increasing expectations of an earlier than anticipated rate hike by the Bank of England. Meanwhile, the U.S. dollar looks to upcoming inflation data.
The sterling held firm at $1.4203 after increasing 0.58% in the previous session. The rise started after a Bank of England policymaker announced the central bank was likely to boost rates well into next year.
Gertjan Vlieghe also reported that an increase could come earlier if the economy recovers more quickly than anticipated.
The sterling traded at 85.83 pence per euro against the euro. It was traded close to its five-week peak of 85.615 pence. Meanwhile, the pound reached a three-year peak of 156.02 yen.
Furthermore, the euro traded at $1.2192, hovering below its 5 1/2-month high, reached on Tuesday of $1.2266 as dovish comments from European Central Bank officials sapped its momentum ahead of its policy meeting on June 10.
The American currency increased to 109.85 against the Japanese yen and hit its highest levels in about seven weeks.
President Joe Biden will publish on Friday a $6 trillion budget for 2022
The dollar was supported by a rise from higher U.S. bond yields after a New York Times report that President Joe Biden will publish on Friday a $6 trillion budget for 2022.
The proposal came as the U.S. economic rebound appears to gain momentum.
The number of Americans filing new claims for unemployment benefits fell more than anticipated last week to a seasonally adjusted 406,000, with companies desperate for workers to meet rising demand unleashed by a rapidly reopening economy.
Moreover, the offshore Chinese yuan traded 6.3755 per dollar, reaching a three-year peak of 6.3679 overnight on rising expectations the Chinese central bank is comfortable with a stronger currency amid the country’s economic revival.
In cryptocurrency markets, bitcoin traded at $38,094, relatively stable during the past 24 hours. Meanwhile, the second-largest cryptocurrency traded at Ether at $2,732.
