|06 December, 2019

Sterling slips after 3-day rally, set for best week since mid-October

On Friday the pound slipped 0.2% to $1.3138, just off a $1.3166 high touched on Thursday

Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna, Austria, November 16, 2017. Image used for illustrative purpose

Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna, Austria, November 16, 2017. Image used for illustrative purpose

REUTERS/Leonhard Foeger

Sterling slipped on Friday, consolidating after three days of robust gains that took the British currency to 2-1/2-year high versus the euro and a seven-month high to the dollar on signs that next week's election will yield a Conservative Party win.

The pound is still headed for its best week since mid-October, having risen 1.5% against the dollar and almost 1% to the euro as various opinion polls indicate a comfortable majority for the ruling party.

But on Friday it slipped 0.2% to $1.3138, just off a $1.3166 high touched Thursday, while against the euro it traded at 84.58 pence, having traded as high as 84.31 pence this week.

"It's a small move and no fundamental change (in terms of what opinion polls show)," Nordea analyst Morten Lund said. "From a risk-reward perspective most people are too optimistic but if you look at option markets you can see some people positioning for sterling weakness."

Leaders of the two main parties will go head-to-head in a TV debate later on Friday.

(Reporting by Sujata Rao; Editing by Dhara Ranasinghe) ((sujata.rao@thomsonreuters.com; +44 207 542 6176;))

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