2025.05.1410:33:40UTC+00Sterling Strengthens to 1-Week High

The British pound experienced an uptick, surpassing $1.333 to reach its highest level in a week. This increase is largely attributed to a general weakening of the US dollar, following announcements of ongoing discussions about currency exchange practices between the United States and South Korea. This development prompted a decline in the dollar as both nations have agreed to continue these dialogues, thereby reducing demand for the dollar and boosting the appeal of major global currencies. Domestically, the focus shifted to remarks from officials at the Bank of England. Deputy Governor Sarah Breeden highlighted the necessity for long-term reforms in the bond market, while Catherine Mann underscored the importance of clearer indications of reduced pricing power before advocating for further rate cuts. In parallel, UK economic data revealed a rise in the unemployment rate to 4.5%, the highest since 2021, alongside a deceleration in wage growth. These factors have slightly increased expectations for continued monetary easing by the Bank of England, particularly following the recent 25 basis point rate cut, which resulted in a divided vote among policymakers.