Sterling Holds Gains vs. Dollar After Risk-Led Rebound

On Tuesday afternoon, sterling was flat against the dollar at $1.3723, holding on to its Monday bounce.

Against the euro, it was also flat at 85.59 pence.

“I think we’re now looking to Powell’s Jackson Hole speech on Friday for the market’s next impetus, though expectations for a hawkish shift do appear to have been dialled back over the last few sessions,” said Michael Brown, senior market analyst at Caxton FX.

Speculators reduced their net long position on the pound in the week up to last Tuesday, CFTC data showed on Friday. This means that speculators are less bullish on the currency than they were earlier.

On Monday, survey data published showing Britain’s post-lockdown economic rebound slowed sharply in August, as companies struggled with unprecedented shortages of staff and materials.

The IHS Markit/CIPS flash composite PMI dropped for the third month in a row, sliding to 55.3 from 59.2 in July – a sharper slowdown than economists had forecast.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Ritvik Carvalho; Editing by Giles Elgood and Alison Williams)