Forex – Pound Drops as Analyst Cools Hopes of BIg U.K Fiscal Stimulus

© Reuters.

By Yasin Ebrahim – The pound hovered near three-month lows against the dollar Thursday, shrugging off better-than-expected U.K. retail sales data amid falling hopes the U.K. is set to unveil a big increase in fiscal spending next month.

“The U.K. government is unlikely to unveil a big increase in fiscal spending in the March 11 Budget,” Bank of America said. “We don’t expect a meaningful fiscal impulse near term.”

fell 0.31% to $1.2879, shrugging off data showing a better-than-expected rise in U.K. retail sales of 0.9% last month.

Weakness in cable underpinned the dollar’s advance amid signs the U.S. economy remains on solid footing.

The , which measures the green against a trade-weighted basket of six major currencies, rose by 0.16% to 99.76.

The Philadelphia Fed said Thursday its rose to a reading of 36.12, a three-year high, from 17 in January.

The U.S. Department of Labor, meanwhile, reported that rose by 4,000 to a seasonally adjusted 210,000, in line with economists’ forecasts.

rose 0.67% to $112.09 as traders questioned whether the yen is at risk of losing its safe-haven status against the greenback as Japan’s economy is more likely to be hurt by the impact of the coronavirus given its proximity to China, ground zero of the virus.

The greenback is a “more practical safe haven” than the Japanese yen for investors seeking protection from coronavirus risks, said Rabobank FX strategist Jane Foley.

fell 0.12% to $1.0791.

gained 0.30% to C$1.3258, as loonie fell further on easing oil prices despite data showing a smaller-than-expected rise in weekly supplies.

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