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London - The pound swung between gains and losses on Friday, whipsawed by headlines surrounding the status of the U.K.’s eventual exit from the EU.
Still, the currency headed for its first weekly advance in a month as market pricing for a rate increase by the Bank of England climbed. Sterling was trading higher on the day, after earlier falling 45 pips in just one minute as Chancellor Angela Merkel’s press secretary said that it was too early to discuss any transition deals on Brexit.
European Commission President Jean Claude Juncker also said Friday that the process would take longer than initially thought.
“No one has a clue right now, and sterling markets are trading irrationally to headlines that may not mean much in the grand scheme of Brexit negotiations,” said Viraj Patel, a currency strategist at ING Groep NV.
The pound rose 0.2% to $1.3289 as of 13:19, and was headed for a weekly gain of 1.7%. Sterling rose 0.3% to 88.94 pence per euro. The yield on 10-year gilts was steady at 1.39%.
Even as sterling whipsawed on Friday, it has defied Brexit risks to be the best-performing major currency over the past year.
Money markets are now pricing an 88% that the central bank will raise its benchmark bank rate when it meets on November 2, compared with the 84% priced in at the end of last week.
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