LONDON, April 22 Reuters Sterling slipped on Thursday in quiet currency market trade ahead of a European Central Bank meeting, while investors weighed up the outlook for an economic recovery from COVID19 in the UK.
After a short squeeze at the start of April, the pound has strengthened against the dollar in recent weeks a move which Kenneth Broux, FX strategist at Societe Generale said was driven by U.S. Treasury yields coming down from their recent highs, which prompted the dollar to weaken.
If U.S. 10year yields were to test and break 1.50, that would be bullish for the pound, certainly against the dollar, Broux said.
I think the macro economic data in the UK is brightening, weve seen that in the economic numbers this week we also have strong consumption.
The only question really for the pound is how much is priced in, in terms of the economy. We know Q2 will be strongish but we dont know how strong it is and what is priced in.
British manufacturers expectations of an economic rebound rose to their highest since 1973 this month as the country began to recover from the slump caused by the COVID19 pandemic, the Confederation of British Industry said on Thursday.
At 1038 GMT, the pound was at 1.3915 versus the dollar, down 0.1 on the day. Versus the euro, it was down around 0.2 at 86.605 pence per euro.
Earlier this week, sterling hit a sixweek high against the dollar after Britains unemployment rate unexpectedly fell for a second month in a row in the December…