2023-11-24 11:00:00
Around 11:15 a.m., the British currency gained 0.16% against the greenback, to 1.2554 dollars per pound, and rose 0.13% against the euro to 86.88 pence per euro.
The British pound appreciated slightly on Friday against the euro and the dollar, benefiting from positive economic data published the day before, while the Turkish lira slipped despite the strong monetary tightening decided by the country’s central bank.
Around 10:15 a.m. GMT (11:15 a.m. in Paris), the British currency gained 0.16% against the greenback, to 1.2554 dollars per pound, and rose 0.13% against the euro to 86.88 pence per pound. euro.
The British pound continued to appreciate slightly following the “rare positive news on the state of the British economy” on Thursday, notes Matthew Ryan, analyst at Ebury.
In the United Kingdom, S&P Global’s Flash Composite PMI leading growth indicator, published on Thursday, came in at 50.1 points for November, a slight improvement compared to 48.7 points in October.
“The rebound in services activity, in particular, should ease concerns about the possibility of a recession in the UK, and we remain hopeful that a contraction in GDP will be avoided in the final quarter of year,” continues Mr. Ryan.
The chief economist of the Bank of England (BoE) Huw Pill reiterated on Friday in an interview published by the Financial Times the need for the institution to remain firm in its fight against inflation.
He recalled that overall inflation had certainly fallen, but that this was due “largely to exogenous factors”, namely “the fall in energy prices and the slowdown in the rise in food prices , as well as the stabilization of prices of international goods.
The market is now awaiting the publication of PMI data in the United States on Friday on services and manufacturing activity.
“Both indicators are expected to have cooled last month, with manufacturing expected to fall into contraction territory,” which should keep the dollar under pressure, comments James Harte, analyst at Tickmill.
Mr. Harte also recalls that “many American investors took a long weekend following the Thanksgiving holiday (Thursday)”, meaning that “trading is less numerous” on the foreign exchange market and therefore, “ that there is significant potential for volatility.
In Turkey, the Turkish Central Bank on Thursday raised its key rate for the sixth consecutive month, to 40%, the highest since Recep Tayyip Erdogan came to power.
The Bank thus raised its rate by 500 basis points compared to last month, and specified that the level of monetary tightening is “very close to the level required to establish the course of disinflation”.
Turkey’s official annual inflation rate peaked at 85% last October and then, after a sharp reduction, jumped again to 61% in October.
The Turkish lira did not react to this drastic monetary tightening, losing 0.18% to 28.87 pounds per dollar.
“The fact that the exchange rate shows no trend except the tendency towards devaluation (…) proves that it is an artificial exchange rate,” underlines Ulrich Leuchtmann, analyst at Commerzbank .
“No one knows where the Turkish lira would trade if the exchange rate could move freely,” he insists.
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