Sterling Eyes Weekly Gain vs Dollar in Choppy Markets

Sterling was on track for a weekly gain versus the dollar on Friday in choppy markets, as traders digested high U.S. political drama and a fresh splurge of bond buying by the Bank of England.

The pound is up more than 1 for the week, although it fell back around a quarter of a percent on the day to trade around the 1.31 mark.

Currencies seen as riskier, including the pound, have strengthened as Democratic candidate Joe Biden has gained ground on U.S. President Donald Trump in key battleground states in the race for the White House.

The Bank of England on Thursday said it was increasing the size of its already huge bondbuying stimulus by a largerthanexpected 150 billion pounds 197 billion, as it braced for more economic damage from coronavirus lockdowns.

While the BoEs Monetary Policy Committee MPC increased the Asset Purchase Facility by GBP 150bn, more than the GBP 100bn that the market expected, there was no change in rates and, significantly, no mention of negative rates, said Marshall Gittler, head of investment research at BDSwiss Group, in a note.

Moreover the MPC projected that inflation would return to the target 2 level by the end of next year even without further rate cuts. Now that thats out of the way, its back to worrying about Brexit.

Uncertainty over the terms of Britains exit from the European Union have long weighed on sterling.

On Friday, senior EU official Thierry Breton said there was a 5050 chance of a trade deal, with negotiations expected to…

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