Sterling Gains Against Dollar and Euro as BoE Meeting Nears
LONDON (Reuters) - Sterling gained against a broadly weaker dollar on Monday, as traders' attention turns back towards Britain and the pound ahead of this week's Bank of England meeting and next week's update on the country's public finances.
The pound gained 0.27% to $1.2973, just shy of last week's four-month high, but the move was largely in line with other European currencies as worries about U.S. growth continue to weigh on the dollar. [FRX/]
Versus the euro, the pound was a fraction stronger at 84.05 pence, having weakened sharply from around 82 pence per euro in early March, on the back of Germany's massive spending plans.
The pound has largely been buffeted by developments in Europe and the United States but the next few weeks will offer some important local drivers.
"It would be fair to say that GBP has not been top of mind for investors since the February BoE meeting. Tariff talk, trade uncertainty and the German fiscal bazooka have dominated price action in both rates and FX," BofA analysts said in a note.
"Heading into the (next) BoE meeting, GBP should find some focus with a heavy schedule of events, culminating in the Spring Forecast on 26 March."
They added that the pound's weakening against the euro has been "excessive" and the currency is ripe for a comeback.
The Bank of England meets on Thursday when it is expected to hold rates, leaving investors' focus on whether official remarks disrupt market expectations of two more 25 basis point rate cuts by year end.
Wage data is also released on Thursday and will feed into that assessment.
The following week finance minister Rachel Reeves will give an update on the public finances, a moment that investors say could prompt another market shock to an economy that is increasingly reliant on fickle foreign funds.
(Reporting by Alun John; Editing by Kirsten Donovan)
