The Pound to Euro (GBP/EUR) exchange rate is trading around 1.1455 while the Pound to Dollar (GBP/USD) rate has strengthened to 1.3285, with Sterling showing modest resilience at the start of the week.
Lloyds notes that the Pound Sterling is being supported by relatively firm UK rate expectations, although gains remain limited by ongoing global uncertainty and softer domestic growth signals.
The bank highlights that UK interest rates are expected to remain comparatively elevated in the near term, which is helping to underpin the currency.
“UK rate expectations remain relatively firm, providing some support for Sterling in the near term.”
At the same time, Lloyds cautions that the broader outlook remains uncertain, with global risk conditions and domestic economic performance likely to influence direction.
“Sterling’s outlook will continue to depend on global risk sentiment and the evolving UK growth backdrop.”
Overall, Lloyds suggests that while the Pound can hold steady in the short term, upside potential is likely to remain capped.
