Pound Sterling rose smartly against a receding US Dollar on Wednesday as the Euro, Japanese Yen and Swiss Franc each rose further against the Renminbi and greenback following the People’s Bank of China’s latest central parity fixings.
The two slight increases in the People’s Bank of China’s central parity fixes for USD/CNY on Monday and Tuesday have stoked speculation that it might be contemplating a devaluation of the Renminbi, however, the fixes for the 24 other currencies in the basket show that a devaluation is likely not on Beijing’s agenda.
The Pound to Dollar rate fell below a major long-term pivot level on Monday and could now face headwinds on any recovery above 1.2850 on Tuesday, including sales associated with Beijing’s management of GBP/CNY, and possible further sales of GBP/JPY and GBP/EUR from the FX desk at JPMorgan.
Pound rallies as UK 'spared' with 10% tariff.