Pound Gains Against Euro, Holds Steady Against Dollar

In London, the pound experienced gains against the euro on Thursday and remained stable against the US dollar. This movement occurred after recently released economic data mitigated concerns about the British economy amidst the backdrop of US tariffs.

The worries regarding the repercussions of US tariffs on both economic expansion and inflation have led investors to move away from American assets, including the dollar.

Sterling stabilized at $1.3243 and is currently on a trajectory for an eight-day streak of gains relative to the US currency.

The pound also saw increased strength against the euro, which decreased to 85.90 pence in anticipation of an expected interest rate reduction by the European Central Bank later on Thursday.

Trading activity and market fluctuations were relatively muted before the extended Easter holiday, with UK markets set to be closed on both Friday and Monday.

Recent economic figures indicate that the UK’s economic growth is being sustained, inflation is moderating, and wage growth remains robust, even with a decrease in job vacancies prior to an increase in employer taxes this month.

Coupled with anticipations of a potential trade agreement between the US and the UK, and a weaker dollar, the UK’s economic resilience has contributed to the pound’s upward trend.

According to Kenneth Broux, the head of corporate research FX and rates at Societe Generale, “The environment for the UK and for sterling is actually quite favorable.”

He added, “Provided that we don’t experience another risk-off event or a further surge in gilt yields, sterling is likely to continue performing well.”

UK gilt yields, which had increased sharply last week due to concerns about Trump’s trade tariffs, have since decreased this week.