© Reuters. The book touches a vertex of a month and a half
Investing.com – The pound fell to a low of one and a half months against the dollar broadly stronger on Thursday, as expectations of a more rapid rise of us interest rates this year have continued to support the greenback.
The GBP / USD reached a low of 1,3732, the lowest level since January 15, and was at 1,3740 at 05:17 AM (10h17 GMT), down 0.14% for the day.
The dollar remained supported after the federal Reserve chairman, Jerome Powell, has said on Tuesday that the economic outlook for the United States remained promising, supporting bets on further rate hikes from the Fed this year.
These remarks have strengthened the expectation that the u.s. central bank could achieve the four rate increases this year, rather than the three that it had previously reported.
Expectations of higher borrowing costs tend to support the dollar, because higher rates make the american currency more attractive for investors in search of yields.
Investors are waiting for the second day of Congressional testimony by Powell later in the day, to see if the head of the Fed would reaffirm its vision hawkish of the economy.
The pound is under pressure after publication of data on Thursday showing that business growth in the Uk has reached its lowest level in eight months in February in the face of uncertainty about Brexit.
The research firm Markit said that its purchasing managers index manufacturing fell to 55.2 last month, compared to 55.3 in January.
The pound sterling was also put under pressure by new concerns about the Brexit after the british Prime minister Theresa May has said that the draft text of the EU, published on Wednesday, will undermine the Great Britain and a threat to its constitutional integrity.
The british pound was down against the euro, with EUR / GBP rising 0.15% to 0,8875.
In the euro zone, data on Thursday showed that manufacturing activity slowed slightly in February but remained solid.
The final reading of the manufacturing PMI for the euro zone fell to 58.6 in February from 59.6 in January.