The British pound continues to surprise financial markets by maintaining its recent gains against both the U.S. dollar and the euro, despite volatile geopolitical conditions globally. Investors remain cautious, especially with concerns over the U.S. Federal Reserve’s independence sending ripples through international currency markets.
Currently, sterling holds steady at $1.3471 against the dollar and 86.62 pence against the euro. While upcoming UK gross domestic product figures are anticipated, market players are largely focused on the more impactful jobs and inflation data expected next week, which could influence the Bank of England’s decisions on monetary policy.
Market sentiment currently anticipates one or two rate cuts within the year, depending on inflation trends. However, Nick Rees from Monex Europe emphasizes that the pound’s positive turn owes more to distractions from U.S.-related geopolitical issues than to strong UK fundamentals. Meanwhile, some analysts advise betting on the euro strengthening against the pound amidst these developments.
(With inputs from agencies.)
