Sterling on Track for Weekly Gains after Election, BOE

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LONDON, 07 May Reuters Sterling was a touch higher versus the dollar and steadied against the euro on Friday, but was on track for weekly gains against both as traders watched for British election results.

The British currency was unable to hold on to gains made on Thursday after the Bank of England slowed the pace of its trilliondollar bondpurchasing programme.

The pound was 0.2 higher at 1.3922 versus a weakening dollar at 0834 GMT. It was up to flat against the euro at 86.80 pence.

Traders were looking for evidence of any political risk after Thursdays elections.

Of most interest to sterling traders is the Scottish election, where the proindependence ruling Scottish National Party has vowed to call another referendum on breaking away from the United Kingdom if it wins a majority of seats.

Polls put the SNP significantly ahead of rivals but it could fall short of an outright majority. Just over a third of the results will be announced on Friday and the remainder will be announced on Saturday.

ING analysts said that a new Scottish referendum is an event risk that could hold GBP back, but otherwise an optimistic assessment from the BoE yesterday should continue to see GBP supported.

The BOE predicted a sharper rebound in the British economy thanks to easing COVID19 restrictions but said it needed clear evidence of a recovery before tightening policy.

It forecast economic growth of 7.25 in 2021, up from a 5 growth forecast in February, while predicting that…

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