Pound hits highest level since late October
The pound has jumped to its highest level on the dollar since late-October this week, having posted its biggest daily gain since April on Wednesday. The upward revision to the November PMI figures has raised hopes that Britain’s economy is not slowing by quite the extent that market participants had feared, albeit with the caveat that we’re still looking at relatively muted levels of growth, way below where policymakers would hope that we’d be.
Yet, with the economy continuing to trundle along, and with the uncertainty surrounding the budget now largely in the rear view mirror, sterling has found some welcome breathing room. Focus will quickly shift to the December meeting of the Bank of England, with another 25 basis point cut already almost entirely baked in by markets. Focus surrounding the decision will instead be on where the bank sees rates going in 2026.
Author
Matthew Ryan, CFA
Ebury
Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.
