Market News
Sterling weakens versus dollar but stays close to over three-year high - REUTERS
LONDON, May 27 (Reuters) - The pound ticked lower versus a broadly stronger dollar on Tuesday, yet remained close to a more than three-year high scaled on Monday as reduced bets on Bank of England rate cuts and some brighter economic data lifted the mood.
At 1110 GMT, the pound was down 0.13% against the dollar at 1.35470. , not far from the 1.359 it touched on Tuesday, its highest level against the greenback since February 2022.
The dollar was stronger against a range of currencies on Tuesday as investors took comfort from U.S. President Donald Trump's decision to delay higher tariffs on the European Union while the yen weakened as Japanese bond yields slumped.
But the pound has gained more than 8% against the dollar in 2025 amid erratic U.S. trade policy.
Michael Brown, senior research strategist at Pepperstone said while the pound's recent strength is largely a dollar weakness story, there are a few idiosyncratic factors at play.
"We did have a much more hawkish than expected May policy decision from the BoE, then compounding that we had hotter than expected UK inflation last week which has seen participants continuing to trim their bets on BoE easing this year."
