The British pound fell against a stronger US dollar on Friday, but recovered some of the previous session’s losses against the euro and posted a small weekly gain as market attention focused on the possibility of a Bank of England (BOE) rate hike next week.

The US dollar rose about 0.9%, surging as government bonds rose and traders saw the new inflation reports as a challenge for major central banks to cut back on asset purchases. faster than expected.

The strength of the US dollar saw the cable, which had been stable for much of Friday’s European session, fall to a two-week low.

The pound lost 0.8% on the day to US $ 1.36835 and 0.5% on the week.

However, against the euro, the pound rose about 0.4% to 0.84405 per euro, up 0.3% per week.

The pound had fallen against the euro in the previous session after the European Central Bank meeting left investors expecting a rate hike next year and did not allay their fears about soaring inflation, leading to higher euro area bond yields and a stronger euro.

In Taipei, the new Taiwan dollar appreciated against the greenback on Friday, gaining NT $ 0.014 to close at NT $ 27.820, up 0.3% for the week.

The pound’s movements this week have been prompted by speculation whether the Bank of England will hike rates at its Thursday meeting, or whether concerns about the possible long-term impact of economic growth resulting supply chain disruptions and Brexit would cause the bank to hold back.

The UK has threatened to open trade dispute proceedings against France if Paris imposes sanctions on London in a rapidly deteriorating stalemate over post-Brexit fishing rights.

Markets were expecting a 62% chance of a rise at next week’s meeting, up from 56% in the previous session, according to CME data.

“Our suspicion is that the pound should find some support as the BOE meeting on Thursday approaches, and with a lot of positives in the price of the euro, the resistance at 0.8500 should hold for now. “, wrote the strategists of ING FX in a note to clients.

CNA Supplementary Reports, with Editor-in-Chief

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