Pound Gains Amid US Shutdown Uncertainty: Sterling Faces Domestic Challenges

The British pound rose against the U.S. dollar as investors grew cautious due to a government shutdown in Washington D.C. Potential delays in economic reports could influence Federal Reserve decisions, pushing investors to seek private sector insights. Domestic challenges like inflation and economic stagnation cap sterling gains.

The pound experienced an uptick against the dollar on Wednesday, as the U.S. government shutdown created turbulence for American assets, leading investors to tread carefully.

This shutdown threatens to delay crucial economic data that feeds into the Federal Reserve's policy-making, compelling reliance on private metrics like the ADP employment report for guidance.

Despite a September slip, sterling remains robust against the dollar for 2025, though domestic hurdles like inflation hamper further rises.

(With inputs from agencies.)