Sterling Stung: Pounds Plummet Amidst Dollar Surge

Sterling fell to a nine-month low against the dollar, driven by the U.S. currency's rise under President Trump's policies. With the pound down 0.82% at $1.2422, concerns over UK economic slowdown and rate cuts weighed on its performance. The euro and yen also weakened.

Sterling tumbled to a near nine-month low against the dollar on Thursday, as the U.S. currency continued its relentless rise powered by expectations of supportive economic policies under President Donald Trump.

The pound slid 0.82% to $1.2422, marking its lowest since April 2024, after breaching resistance around $1.2475. The euro also suffered, hitting a more than two-year low, while the Japanese yen and other currencies were marginally weaker against the advancing dollar.

Trump's anticipated policies are likely to stimulate growth and apply upward pressure on prices, urging the Federal Reserve to tread carefully with rate cuts. This bolsters U.S. Treasury yields and boosts dollar demand. Sterling's larger decline reverses last year's trend when it depreciated less than other G10 currencies against the dollar. Persisting inflation and early-year growth had previously compelled the Bank of England towards caution in rate cuts.

(With inputs from agencies.)