Sterling breached $1.33 against the greenback for the first time since March 2022 on Thursday, and was trading at $1.3315 early London time Monday.
The pound's rally was tied to the BOE communication and "looks fully justified," Chris Turner, global head of markets at ING, said in a Friday note.
Higher rates are traditionally a positive for a domestic currency as the higher yield can attract more foreign capital.
watch nowGabriella Dickens, G7 economist at AXA Investment Managers, also cautioned on the pound's outlook in a note Thursday.
If the government is more stringent on fiscal policy, we think the Bank will be forced to increase the pace of the cutting cycle to offset the hit on both households' and businesses' finances."
Persons:
Keir Starmer, BOE, Chris Turner, Turner, Jane Foley, Gabriella Dickens, Dickens
Organizations:
Bank of England, Labour, Sterling, greenback, London, ING, Fed, U.K, European Union, Rabobank London, CNBC, AXA Investment, Bank, quicken
Locations:
Britain, –