British Pound Rises to $1.35 as Dollar Weakens
The British pound rose above $1.35, lifted by broad dollar weakness after US jobs data pointed to further cooling in the labor market. The US dollar lost ground broadly during trading hours on Friday. The market anticipates a US Federal Reserve rates cut in September as labour market underperformed expectations.
FX markets now pricing about 66 basis points of easing in 2025. The US economy added just 22K jobs in August, well short of the 75K forecast, while the unemployment rate rose to 4.3%, the highest since 2021 and in line with expectations.
Still, sterling is on track for a 0.3% weekly decline, as fiscal uncertainty and concerns ahead of the Autumn Budget in November weighed on UK assets. Meanwhile, Bank of England Governor Andrew Bailey told MPs there is “considerably more doubt” about the timing of UK rate cuts.
Sterling faces renewed falls ahead of the U.K. autumn budget on Nov. 26, Ebury strategist Matthew Ryan says in a note. Sterling has recovered modestly from losses sustained earlier this week following a selloff in long-dated U.K. government bonds amid fiscal concerns.
Bonds have bounced back in the U.K. and globally but risks remain elevated, Ryan says. “It would be foolhardy of us to bet that the worst of the gilt selloff is behind us.” Markets will punish the government if it fails to deliver a budget that guarantees fiscal sustainability, he says.
Meanwhile, France’s official reserve assets rose to €304.80 billion in August 2025 from €303.04 billion in the previous month. This was the largest amount since March, largely due to an increase in gold reserves (€229.16 billion vs €226.25 billion in July).
In contrast, declines were recorded in foreign currency reserves (€30.81 billion vs €31.42 billion), claims on the IMF (€38.42 billion vs €38.86 billion), and other reserve assets (€6.42 billion vs €6.51 billion). #British Pound Rises to $1.35 as Dollar Weakens#
