Pound holds near three-year high on trade optimism
The British pound dipped slightly against the dollar but remained close to its highest level since 2022 reached the day before as hot inflation and improving relations with Europe and the U.S. continued to support the currency.
The pound was last down 0.1% against the dollar at $1.3399, having touched a high of $1.3468 on Wednesday, its strongest level in over three years.
Britain has recently looked to improve relations with the U.S. and the European Union, becoming the first nation to sign a deal with the U.S. after President Trump's reciprocal tariffs, and agreeing its biggest reset of trade and defence ties with the EU since Brexit this week.
"The trade deals are generally good news for the pound," said ING FX strategist Francesco Pesole. "We still think the pound is in a pretty good position."
Sterling was up 0.1% against at 84.2 pence per euro .
A downturn in business activity for British firms eased this month, the S&P Global UK Composite Purchasing Managers' Index (PMI) showed on Thursday, as businesses grew a little cheerier about the outlook, including fewer worries about the impact of higher U.S. tariffs.
The British currency has also been supported this week by hot inflation data, which might lower the prospect of rates cuts from the Bank of England.
The BoE's chief economist Huw Pill said this week that a quarterly pace of cuts was "too rapid" given still strong wage pressures on inflation.
"There's a bit of dissent building at the Bank of England," ING's Pesole noted.
The British central bank lowered interest rates by a quarter point to 4.25% on May 8 in a three-way split vote, with two members of the Monetary Policy Committee favouring a bigger cut, and two - including Pill - preferring a hold.
(Reporting by Samuel Indyk, editing by Ed Osmond)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Tahawul Tech
4 hours ago
- Tahawul Tech
Nintendo Switch 2 Archives
"We're entering this transition from a position of strength and bringing real-world experience to meet the demands of the AI factory". Learn more about @Vertiv's alignment with @nvidia below. #Vertiv #NVIDIA #tahawultech
The National
5 hours ago
- The National
TV art guru jailed for 2.5 years for deals with suspected Hezbollah financier
An art expert who appeared on a BBC auction show was jailed for two-and-a-half years on Friday after a series of deals with a suspected Hezbollah financier. Oghenochuko Ojiri, 53, also known as Ochuko, sold artwork worth around £140,000 to Nazem Ahmad, a man designated by US authorities for alleged laundering for the Lebanese group. A regular on the Bargain Hunt programme, Ojiri was arrested two years ago by officers from the UK's National Terrorist Financial Investigation Unit. The investigation centred on alleged terrorist financing and money laundering by Mr Ahmad, an art collector and diamond dealer. Mr Ahmad, 60, a dual Belgian- Lebanese citizen, is under sanction s by Britain and the US. He has been accused of using the UK's fine art market to run an international financing operation for Hezbollah which is proscribed in the UK as a terrorist organisation. The art dealer's connection to the investigation into Mr Ahmad was first revealed by The National on Thursday, when he was charged. Ojiri is known for his appearances on the BBC's Bargain Hunt and has also appeared on the BBC's Antiques Road Trip. Ojiri had admitted to eight charges of failing to disclose his dealings with Mr Ahmad, which took place between October 2020 and December 2021, contrary to the Terrorism Act 2000. Prosecutor Lyndon Harris told the court hearing in May that Ojiri 'engaged in sales of artwork to Nazem Ahmad, a suspected terrorist financier'. Following the introduction of new money laundering regulations in January 2020 that brought the art market under the supervision of UK Customs, Ojiri is said to have discussed the changes with a colleague, indicating awareness of the rules, he told the court. 'At the time of the transactions, Ojiri knew Mr Ahmad had been sanctioned in the US,' Mr Harris said. 'He accessed news reports about Mr Ahmad and engaged in conversations with others about that, which indicates that he had information about Mr Ahmad.' Mr Ahmad was first accused by the US Treasury in 2019 of laundering substantial amounts of money and being involved in the smuggling of 'blood diamonds' for Hezbollah. He was sanctioned, then in April 2024 charged by the US along with eight associates with offences relating to breaching sanctions regulations. Police swooped on the high-security depot near London's Heathrow Airport in 2024, taking away nearly two dozen works of art belonging to Mr Ahmad, which they believe would probably have funded Hezbollah.
The National
7 hours ago
- The National
Trump presses Fed's Powell to cut interest rates by a full point
US President Donald Trump called on Jerome Powell to cut interest rates by a full percentage point on Thursday, ramping up his pressure on the Federal Reserve chair. Mr Trump's latest attacks on the Fed chair came shortly after a Labour Department report showed employers added 139,000 jobs last month, slower than its March gain but still above economists' projections. The unemployment rate remained steady at 4.2 per cent. ''Too Late' at the Fed is a disaster!,' Mr Trump wrote on Truth Social, referring to Mr Powell. 'Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!' In a series of follow-up posts, Mr Trump claimed rate cuts would allow the US to lower short and long-term rates 'on debt that is coming due'. Mr Trump has regularly attacked Mr Powell in recent months over the Fed chair's caution in cutting interest rates. Mr Powell so far has resisted the pressure from the White House and maintains that policy decisions will be data dependent. He and other members on the rate-setting Federal Open Market Committee are currently debating how Mr Trump's tariffs will affect the economy. Speaking in New York on Thursday, Fed Governor Adriana Kugler laid out her support for keeping rates at their current level due to rising inflation risks. Also speaking on Thursday, Kansas City Fed president Jeff Schmid said he expects tariffs will 'likely push up prices', with their effects not being 'fully apparent for some time'. The Fed, which has left rates unchanged for the past three meetings at roughly 4.3 per cent, will hold its next two-day meeting from June 17-18. The Fed's next blackout period begins at midnight on Saturday, meaning there will be no public communications from the central bank before it announces its next rate decision. Traders anticipate the Fed will keep rates unchanged through the summer, according to CME Group data.
