British Pound Rises Against Dollar, Hovers at 4-Year High
The British pound rose against the dollar by 2% to $1.373, marking its strongest weekly gain in nearly four months. At the current rate, the sterling is hovering near a four-year high amidst broader decline in the value of US dollar.
The latest rally was driven mainly by a weaker US dollar, according to traders as the greenback lost momentum after initial strength during the Israel-Iran conflict faded.
The US dollar also slipped on concerns over the Federal Reserve’s independence amid speculation that President Trump may replace Chair Powell, raising expectations of earlier rate cuts.
Domestically, the pound has been supported by the Bank of England’s reluctance to cut interest rates compared to peers like the European Central Bank (ECB), as UK inflation remains sticky.
Core inflation has shown little movement over the past year, causing concern among BoE officials and complicating rate cut decisions.
Meanwhile, political tensions in the UK grew as Prime Minister Keir Starmer scaled back welfare reform plans in response to opposition from over 100 Labour MPs. The pound climbed above $1.374 on Thursday, its highest since October 2021, according to forex traders.
The concerns over the Fed’s independence and speculation that President Trump may soon name a successor to Chair Powell, raising the chance of earlier rate cuts after US dollar demand.
Meanwhile, the ongoing ceasefire between Israel and Iran reduced fears of a wider conflict, calming inflation concerns and boosting investor sentiment. #British Pound Rises Against Dollar, Hovers at 4-Year High#
