© Reuters. FILE PHOTO: Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company’s headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger/File Photo

(Corrects currency in fifth paragraph)

LONDON – Sterling edged up against the dollar and was flat against the euro on Monday, as risk sentiment across markets recovered somewhat after global growth worries sparked a broad selloff last week.

Concerns that the Delta coronavirus variant could derail the global recovery and worries major central banks would taper emergency stimulus sooner boosted the safe haven dollar last week at the expense of most major rival currencies.

Sterling had its worst week in two months against both the dollar and euro as traders sold off assets perceived as riskier.

The pound clawed back some of its lost ground against the dollar on Monday, edging up 0.2%, but was still pinned below $1.37. Sterling had swung 1.8% lower against the dollar last week.

Against the euro, sterling was flat at 85.90 pence.

The improvement in sentiment was reflected in equity markets, with European stocks gaining ground in early trading.

“Last week, the pound tumbled against the greenback at a time when the financial world turned to risk off due to concerns over the spreading of the Delta coronavirus variant,” said Charalambos Pissouros, head of research at JFD Group, in a note.

“Perhaps market participants consider the pound as a risk-linked currency due to the UK’s large current account deficit.”

Pissouros added the pound could fare better than rivals in the coming months if the Bank of England tapered policy quicker than other central banks.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link