Sterling dips as stock rout boosts dollar, outweighs rate rise boost
LONDON: The pound fell against the dollar on Friday, as a stock market selloff hit currencies more geared towards global growth, while holding broadly steady against the euro around a 19-month high.
LONDON: The pound slipped against the dollar on Friday, as a stock market decline impacted currencies focused on global growth, while remaining steady near a 19-month peak against the euro. Lee Hardman, a senior currency analyst at MUFG, noted that the Bank of England's policy update on Thursday was eclipsed by the intensifying sell-off of AI-related investments.
The Bank's decision to raise rates and suggest further increases, barring a rapid de-escalation in the Gulf or a drop in oil prices, were the primary domestic events of the week. Wall Street tech stocks plummeted on Thursday and continued to drop on Friday, causing the dollar to gain. As a result, the pound reached US$1.3399, marking a 0.4 percent decline, although it remained relatively stable over the week due to earlier gains.
It was equivalent to 83.41 pence per euro, unchanged on the day and week, and near its highest since March 2025, achieved on Thursday following the Bank's meeting. Hardman attributed the recent support for the pound to higher UK growth expectations, increased UK yields, and fiscal concerns becoming a more significant issue in the euro area than in the UK.
Despite the BoE policy update bolstering sterling's upward trend heading into year-end, a potential risk for the currency lies in a more extensive sell-off of AI stocks.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
