LONDON: The pound edged up on Friday, after posting its largest daily drop against the dollar the previous day since March after US inflation data came in hotter than expected, unnerving investors.
Sterling was last up 0.1% on the day at $1.2178, having fallen by 1.1% on Thursday, as the dollar swept higher across the board.
Against the euro, the pound was up 0.1% on the day at 86.40 pence. Sterling fared poorly against the euro on Thursday as well, falling 0.3% in its largest one-day fall in three weeks.
Next week’s data releases might offer a steer on what to expect from the Bank of England when its policymakers meet in early November to set interest rates.
“We remain of the view the BoE won’t help sterling much near term, but a ‘high for longer’ BoE could help sterling versus euro later – we see EURGBP at 85 pence through our forecast horizon,” Bank of America strategists said. Persistently high inflation and record wage growth because of a tight labour market have complicated the BoE’s efforts to anchor consumer prices.