Pound's Surge: Sterling Holds Steady Amid Dollar's Woes

The British pound maintained its position largely unchanged on Monday following a significant rise against the dollar, spurred by unexpectedly weak U.S. employment data last week. This data has bolstered market anticipations for a Federal Reserve rate cut this month.

With the dollar under pressure after August's nonfarm payrolls revealed only 22,000 job additions, expectations are high for a quarter-point rate cut from the Fed next week, with more reductions speculated by year-end. In contrast, the Bank of England is unlikely to cut rates soon, given the UK's higher-than-target inflation.

This disparity in monetary policy could theoretically benefit the pound and UK assets, offering better returns on British interest rates. Nevertheless, investors remain cautious, awaiting central bank meetings and potential quantitative tightening announcements.

(With inputs from agencies.)