Pound steadies on dollar, drops sharply against yen after Healey speech
By Aboki Forex —
The pound strengthened against the dollar and held steady on the euro on Monday, but tumbled 0.8 percent against the yen to 209.41 yen, its lowest since February. Traders were digesting British finance minister John Healey's first major economic speech, which gave the UK currency little clear direction.
Healey sets out investment plans
Healey announced plans to give city regions greater powers to attract private investment. This is part of Prime Minister Andy Burnham's push to devolve power away from central government. He also stressed his commitment to fiscal discipline and to curbing rising costs for business and the public.
Barclays said the market mood was shifting. "The August lull is giving way to a period of increased scrutiny on UK policies and fundamentals, shifting the risk-reward modestly to the downside for the pound," the bank said.
Yen strengthens across the board
The biggest move in the pound was against the yen. Sterling fell to 209.41 yen, its weakest level since February, as the long-under-fire Japanese currency strengthened across the board.
Analysts say the yen could be seeing a change in fortunes. Possible capital repatriation, unwinding carry trades, U.S. political pressure, and expectations for faster interest rate hikes by the Bank of Japan are combining to support the currency.
The yen hit 19-year lows on the pound in August and 40-year lows on the dollar.
For Nigerian businesses and importers with exposure to pound or yen positions, the sharper yen move signals fresh volatility in major currency pairs, but the direct impact on the naira remains indirect.