The British pound showed signs of resilience as it edged higher against the US dollar, marking its first weekly gain since mid-January. This rise was underpinned by growing risk appetite and encouraging economic indicators, including strong growth in services firms and business optimism reaching a two-year high. Despite a slight setback in consumer sentiment, the pound remained buoyed by a global influx of risk assets, indicating a detachment from conventional rate spread dynamics. Investors closely monitored the Bank of England's policy stance amid expectations that higher rates would support the currency, especially as recent inflation data suggested ongoing pressures that could deter rate cuts in the near term. Additionally, comments from BoE policymaker Megan Greene reinforced the cautious approach towards monetary policy adjustments, further solidifying market confidence in the pound.
Meanwhile, the pound also exhibited strength against the euro, with a modest increase indicating sustained resilience across major currency pairs. Analysts noted a weakening correlation between the pound and global equities, although its link remained stronger compared to its relationship with the US dollar. This dynamic hinted at potential further gains for the pound if risk appetite continued to prevail in the markets. Overall, the pound's performance reflected a balance between positive economic fundamentals and cautious optimism regarding central bank policy, positioning it as a currency to watch amidst evolving global market dynamics.
Meanwhile, the pound also exhibited strength against the euro, with a modest increase indicating sustained resilience across major currency pairs. Analysts noted a weakening correlation between the pound and global equities, although its link remained stronger compared to its relationship with the US dollar. This dynamic hinted at potential further gains for the pound if risk appetite continued to prevail in the markets. Overall, the pound's performance reflected a balance between positive economic fundamentals and cautious optimism regarding central bank policy, positioning it as a currency to watch amidst evolving global market dynamics.