Sterling falls for third day as dollar strengthens
Sterling was set for a third straight decline against a stronger U.S. dollar on Thursday, as cautious market sentiment weighed on the British currency.
The pound was down 0.1% at $1.3444 after hitting $1.3567 on Tuesday, its highest level since mid-September. Investors remain cautious ahead of Friday’s U.S. nonfarm payrolls report, while European shares fell on weaker retail earnings and softer commodity prices, News.Az reports, citing Reuters.
Analysts say the market may be too pessimistic about the UK economy. Sterling could perform better than expected in 2026, supported by reduced fiscal and political risks and the potential for closer alignment with the European single market. However, in the short term, the pound’s movement will largely follow the dollar until clearer UK economic data, such as GDP and jobs reports, are released.
Jane Foley, head of forex strategy at Rabobank, noted that the pound’s early-year performance reflects a correction of short positions built up before the November budget. Economist Jeremy Batstone-Carr added that recent UK data shows consumers were less affected by budget measures than feared, although growth in consumption may remain limited.
The euro rose 0.10% to 86.87 pence, recovering slightly from a mid-September low, as political developments and export prospects keep the UK currency in focus.
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