Sterling Tug-Of-War: Pound's Rollercoaster Against Euro and Dollar
Sterling experienced mixed performances, sliding against the euro after consecutive gains while rising against a weakened dollar. Market reactions to easing U.S.-China trade tensions and upcoming British GDP data could affect the currency's trajectory. Economic forecasts suggest potential weaknesses, challenging investors assessing the Bank of England's future monetary policy.
Sterling experienced a downturn against the euro on Wednesday after a solid run of seven days of gains. However, it managed to rise against the weakened dollar as initial optimism from the easing of U.S.-China trade tensions faded earlier in the week.
The euro climbed 0.35% to 84.33 pence, halting the pound's dominant trend over recent days. Analysts like Jane Foley from Rabobank provide caution that sterling may need stronger growth data to maintain its momentum against the euro. Concerns linger about potential growth underperformance in Britain for 2025.
Investors await British GDP data, which could offer insight into future growth, although complications are expected. The Bank of England's monetary strategy remains under scrutiny amid labor market resilience. Meanwhile, sterling gained 0.38% on the dollar underpinned by weaker U.S. inflation data, increasing speculation about the Federal Reserve's policy adjustments.
(With inputs from agencies.)
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