Sterling climbs to multi-week highs

Daily Currency Update

The British pound is gaining year-end momentum across major currency pairs, strengthening notably in mid-week trading. Sterling logged its strongest daily performance against the US dollar in a month and pushed above its post-budget highs versus the euro, signalling improved demand for the currency in global FX markets.

The move comes as investors boost expectations that the Federal Reserve will resume rate cuts in December and continue easing through 2026, an outlook that typically weakens the dollar and provides support for risk-sensitive currencies like the pound.

Market analysts note that a potential dovish shift at the Fed, coupled with stabilising UK economic conditions after Rachel Reeves’ autumn budget, has helped improve overall risk appetite - further lifting sterling.

As a result, euro buyers are now seeing their most favourable levels since late October, while dollar buyers are experiencing their best rates in more than a month.

Given the pound’s sensitivity to shifts in global investor sentiment - particularly from those holding large volumes of UK government debt - this improved outlook is helping drive sterling’s current upward trajectory.