Pound gains 1.2 percent on greenback this week

Story link: Pound gains 1.2 percent on greenback this week

Sterling came out ahead over the US dollar this week on the stronger probability that UK interest rates will rise again soon.

The pound was 0.5 percent higher versus the greenback just on Friday, to a new 26-year high of $2.0587, taking its gain on the week to 1.2 percent.

Elsewhere, sterling added 0.4 percent against the yen this week to ¥249.31, while it gained 0.7 percent to £0.6724 against the euro as UK inflation didn’t seem like it would peak in the near future.

The US dollar was hurt by the continuing difficulties in the subprime mortgage sector, the slow pace of home sales, and the fact that the chairman of the Federal Reserve failed to say anything in his testimony before Congress this week that analysts could make into a case that US interest rates are about to rise.

The US currency dropped 0.2 percent to ¥121.21 in relation to the yen, while it lost 0.4 percent to $1.3835 to the euro over the week.

The Turkish lira faded a bit on Friday after its strong gains on Thursday, dropping 0.3 percent on the day with most analysts believing that more declines are to come.