Sterling Strengthens Amid Economic Concerns and Political Developments
Sterling gained for the second session against the dollar and euro despite economic concerns. Investors turned cautious after UK borrowing figures revealed fiscal challenges and slowing growth. Analysts focus on the Labour Party conference, potential government policy shifts, and the BoE's expected rate cuts as key market determinants.
Sterling was poised for a second consecutive session of gains against both the dollar and the euro as of Monday. This uptick followed weeks of losses driven by apprehensions surrounding the UK's economic stance.
The dollar depreciated Monday on fears of an impending government shutdown, with investors awaiting U.S. economic data that could inform the Federal Reserve's policy trajectory. Analysts noted that recent revelations of increased UK borrowing and flagged momentum in crucial sectors contributed to subdued market sentiment.
Market participants turned their eyes to the Labour Party conference in Liverpool, anticipating potential policy shifts. Meanwhile, British finance minister Rachel Reeves underscored the need for tough fiscal choices. Expectations of a Bank of England interest rate cut are growing as the economy slows.
(With inputs from agencies.)
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