LONDON, April 9 (Reuters) – The pound inched higher on
the dollar on Thursday and held onto the bulk of U.S.-Iran
ceasefire-inspired gains the previous session, though with that
deal looking fragile it failed to climb any further.
Sterling was last up 0.1% on the dollar at $1.3407, well up
from below $1.33 before the deal was announced but off its
Wednesday high of $1.348, reflecting traders’ nervousness about
how sustainable the ceasefire will be.
Israel bombed more targets in Lebanon on Thursday, and there
was no sign Iran had lifted its blockade of the Strait of
Hormuz, which has caused the worst disruption to global energy
supplies in history.
Tehran said there would be no deal as long as Israel was
striking Lebanon.
The dollar has appreciated throughout the conflict as
investors see the U.S. economy as being less exposed to the war
– it is a net energy exporter – than other countries such as
Britain.
The pound, like other European currencies, has risen or
fallen on the dollar depending on headlines.
The pound also gained on the euro on Wednesday, which
Francesco Pesole, currency analyst at ING, said was due to
sterling’s higher sensitivity to gains in equities, which surged
on Wednesday.
The euro was last at 87.11 pence, a touch higher on the day,
and bouncing off its Wednesday low of 86.88 pence.
Pesole said he does not think the pound can appreciate much
more on the euro, noting that expectations of rate hikes from
the European Central Bank could prove more sustained than those
for the Bank of England.
“After all, the BoE was already ready to cut before the war
began,” he said.
