Pound seen climbing against dollar

The pound was seen climbing sharply
higher against its major currency peers on Friday
(September 27th) as the threat of a looming Federal shutdown
in the US held back demand for the greenback.

GBP/USD rose 0.30 per cent to hit
1.6100 in early European trade having been sent lower the day
before by UK growth stats and better-than-forecast US jobless
claims.

Against the euro the pound was also
higher, with the EUR/GBP exchange
rate sliding 0.30 per cent to 0.8384.

The UK economy expanded by 0.7 per
cent in the second quarter, in line with market expectations.

Meanwhile the US Department of
Labor said initial jobless claims in the week ending Sept 20th fell
by 5,000 to a seasonally adjusted 305,000.

The data helped lift the dollar but
pressure remains on the greenback amid mounting uncertainty over
Washington’s ability to agree a budget in time to avoid a federal
shutdown.

Uncertainty over when the Fed is
planning to dial back stimulus is further subduing demand for
dollars, with investors now focused on meetings in October and
December.

USD/JPY slipped nearly 0.40 per
cent on Friday after Japanese finance minister Taro Aso refuted
speculation he is looking to reduce the corporate tax rate.