Pound Climbs to One-Month High
The British pound rose back above $1.325, its strongest level since October 28, extending last week’s 1% gain as the US dollar slid against all major peers, with risk-off sentiment failing to boost the traditional haven currency.
Markets continued digesting the UK’s November budget while awaiting a slate of US economic data this week for clarity on the global interest rate outlook. Chancellor Rachel Reeves rejected accusations of having misled the public about the state of the UK’s finances ahead of her budget, amid criticism over Wednesday’s £26 billion package of tax increases.
Prime Minister Keir Starmer defended the measures, arguing that “necessary choices” were required to avoid additional borrowing. On monetary policy, the Bank of England is expected to deliver a 25 bp rate cut in December, before pausing due to risks of inflation re-accelerating.
In contrast, US markets fully price in a third Fed rate cut in December and at least two more reductions next year.
Source : Tradingeconomics.com
