LONDON, Sept 29 (Reuters) – The pound fell against the
dollar on Tuesday, caught up in the global trend, but
strengthened marginally against the euro as traders awaited a
speech by British Prime Minister Andy Burnham at his governing
Labour Party’s annual conference.
The big picture in currency markets is one of a steadily
strengthening dollar, and sterling was not immune. The pound
lost 0.2% to $1.3226, close to a three-month low, as elevated US
bond yields and oil prices combined to boost the dollar.
But the pound did manage to strengthen against the euro for
a third day, with the common currency last down 0.1% at 85.72
pence.
Burnham will speak later in the day and offer an “honest
conversation” with Britain to spell out the trade-offs in
tackling some of the nation’s deepest problems, such as social
care and the control of utilities, in his first conference
speech as prime minister.
The speech may not have a dramatic effect on markets, but
finance minister John Healey on Monday managed to elicit a small
positive reaction for the pound and helped British government
bonds, known as gilts, avoid the worst of the global selling.
Societe Generale analyst Kenneth Broux said the pound and
gilts had outperformed peers on Monday after Healey’s pledge for
fiscal responsibility.
“But it will take more convincing for gilts that the
government is serious about stabilising spending. PM Burnham
faces a tricky balancing act,” Broux added.
Also in the background for the pound was Bank of England
data showing that unsecured lending to British households in
August rose at the fastest annual pace since at least 1993.
