LONDON, Jan 26 — Sterling held at US$1.35 today, recovering from the three-week low hit in the previous session, as some calm in stocks led traders to buy back into hard-hit currencies even though renewed political uncertainty around Prime Minister Boris Johnson weighed on sentiment.
By 0930 GMT, sterling traded at US$1.35, down marginally on the day but significantly above the US$1.3436 low touched yesterday. The BoE meets next week and markets expect a tightening for a second time since the pandemic hit, raising rates 0.25 per cent to 0.5 per cent as policymakers try to rein in inflation rates currently running at more than double the BoE’s target levels.
Analysts said Johnson’s position looked at serious risk but should he be forced out, the pound was unlikely to move much in the medium term given the policies of the favourites to become his successor.
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