The British currency crossed the symbolic threshold of 1.20 euros for one pound, for the first time since February 3. Around 9:10 p.m. GMT, it advanced by 0.16%, to 1.2005 euros for one pound.
The pound consolidated its gains against the euro on Friday, driven by the monetary trajectory of the Bank of England (BoE), the most voluntary among the major central banks in the world.
The “quid”, its nickname, crossed the symbolic threshold of 1.20 euros for one pound, for the first time since February 3. Around 9:10 p.m. GMT, it advanced by 0.16%, to 1.2005 euros for one pound.
The pound also recovered against the yen and the Swiss franc, although it is usually considered riskier than these two currencies, sought Thursday amid the Ukraine crisis.
The British currency benefited from the announcement on Friday that retail sales had rebounded 1.9% in January in the United Kingdom, after a contraction of 4% the previous month. This is almost double the expectations of economists, who were counting on 1%.
According to LMax analysts, positive labor market data and a better-than-expected inflation gauge, both released earlier this week, had already “raised the likelihood of a hike by 50 basis points ( 0.5 percentage point) by the BoE in March”.
The Bank of England has already made two hikes in December and February.
As for the dollar, it recovered against the euro with the mounting pressure of the crisis in Ukraine, which is undermining the single currency.
In addition, for Christopher Vecchio, analyst for the specialized site DailyFX, “the market got a little carried away” in its assessment of the monetary trajectory of the European Central Bank (ECB), which no longer excludes raising its rates this year.
Currency traders are now expecting two rate hikes in 2022 by the ECB, an optimistic scenario, for the analyst.
“If the market cools because of a Russian incursion into Ukraine, if energy supply is disrupted, the ECB may not even raise rates at all” this year, he warns.