Sterling falls as BoE policymaker says inflation pressures lower

Sterling falls as BoE policymaker says inflation pressures lower
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Sterling falls as BoE policymaker says inflation pressures lower
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Updated 16 February 2016

Sterling falls as BoE policymaker says inflation pressures lower

Sterling falls as BoE policymaker says inflation pressures lower

LONDON: Sterling fell around half a percent against the dollar on Monday after Bank of England policymaker Ian McCafferty said inflationary pressures had fallen, although he still expected the next interest rate move to be up.

Speaking to the Wall Street Journal, McCafferty, who dropped his lone call to hike interest rates earlier this month, said the central bank was not “out of ammunition” if it needed to fight a renewed downturn by cutting interest rates or restarting its bond-buying program.
Sterling fell from around $1.4480 before the article was published to a two-day low of $1.4426. It later recovered to $1.4450, but that still left it down one third of a percent on the day.
“McCafferty’s comments showed his shift in thinking but there wasn’t anything hugely surprising in what he said,” said Bank of Tokyo-Mitsubishi UFJ currency economist Lee Hardman.
He said the more important driver for sterling this week would be a two-day summit at which Prime Minister David Cameron will try to clinch a deal to keep Britain in the European Union.
The cost of hedging against swings in sterling’s value over the next week has jumped to its highest since Britain’s general election last May, as investors brace for volatility stemming from the summit.
“If there was a Brexit scenario, the market is considering the probability that could provide another headwind to growth in the UK and could result in lower rates from the Bank of England later this year,” Hardman said.
Some banks predict falls of up to 20 percent in sterling’s value if Britons vote to leave the EU, although polls suggest that the most likely scenario — just — is that Britain remains in the European Union.
“Although there are other issues also on the agenda, the focus will be on progress on UK renegotiation at this week’s EU leaders’ summit,” said RBC Capital’s head of G10 FX strategy, Adam Colem, adding that any signs of agreement will be positive for the pound.
Against the euro, sterling bounced back from a 14-month low, helped by better appetite for riskier currencies and assets. It traded up half a percent at 77.195 pence per euro, having traded as weakly as 78.975 pence per euro on Thursday.
The single currency tends to move in sync with safe-haven assets due to its low yield and often underperforms when global stocks and commodities rise. Sterling, on the other hand, tends to rise along with risk appetite, on account of its higher interest rate and large current account deficit.
Sterling traders be focused on monthly British inflation data due on Tuesday, which expected to show a rise of 0.3 percent year-on-year.
Wage growth data will be released on Wednesday.


Saudi fintech startup secures $1.2m seed funding

Saudi fintech startup secures $1.2m seed funding
Updated 12 min 42 sec ago

Saudi fintech startup secures $1.2m seed funding

Saudi fintech startup secures $1.2m seed funding
  • The Kingdom has proved to be a fruitful market for investment in startups

RIYADH: A Saudi financial technology company has raised $1.2 million in seed funding.

Hakbah’s success comes six months after the Riyadh-based startup received regulatory approval from the Saudi Central Bank (SAMA) to operate in the Kingdom.

The specific investors behind the financing have not been revealed.

Founded in late 2018 by Naif AbuSaida, Hakbah specializes in alternative saving and savings groups.

On its LinkedIn profile, the firm describes its mission “is to digitize financial habits by developing innovative savings products that help increase financial inclusion, support a non-cash society, and bridge the gender gap in savings.”

Hakbah graduated from the DIFC Fintech Accelerator Program 2019 in Dubai.

The Kingdom has proved to be a fruitful market for investment in startups. Saudi Arabia recorded a 35 percent year-on-year increase in the number of investment deals in the technology startup sector last year, according to a new industry report.

A study by data research platform Magnitt found that the Kingdom accounted for 18 percent of the 496 investment deals throughout the Middle East and North Africa (MENA) region last year.

Saudi Arabia, the UAE, and Egypt were the largest markets, accounting for 68 percent of total deals. However, while the Kingdom saw the number of investment deals increase by more than one-third, the UAE and Egypt witnessed volume decreases of 17 percent and 10 percent, respectively.

When it came to the monetary value of the deals, Saudi Arabia recorded a surge of 55 percent year-on-year to $152 million.

Nabeel Koshak, CEO at Saudi Venture Capital Co., said: “Saudi Arabia is witnessing an increase in the quality and quantity in the deal flow of startups. I am thrilled by the distinguished entrepreneurs who are creating fast growth and scalable startups.

“Despite the slowdown of (the coronavirus disease) COVID-19, Saudi Arabia saw a record increase in venture capital funding (55 percent) in 2020 compared with 2019.”

In its predictions for this year, Magnitt forecast that Saudi Arabia would overtake Egypt by total number of investments and capital deployed and become second only to the UAE in the rankings.