Sterling Steady: Pound Holds Strong Amid Inflation and Global Relations
The British pound remains near its peak against the dollar due to positive shifts in international trade relations and elevated inflation. Recent trade agreements with the U.S. and the European Union bolster its position, while mixed signals from the Bank of England influence currency dynamics and interest rate expectations.
The British pound has maintained its strength against the dollar, trading near its highest levels since 2022, despite a slight dip. The currency's resilience is attributed to high inflation rates and improved trade relations with the U.S. and Europe.
After reaching a peak of $1.3468, the pound settled at $1.3399 against the dollar. Britain's recent trade and defense agreements with the U.S. and the EU since Brexit have positively impacted the currency, with analysts like ING's Francesco Pesole optimistic about its outlook.
Business sentiment among British firms has improved, according to the S&P Global UK Composite PMI. Reduced concern over U.S. tariffs and strong inflation data have influenced the Bank of England's stance on interest rate cuts, with some dissent among policymakers.
(With inputs from agencies.)
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