British Pound Experiences Uptick Amid European Shares Gain

British Pound Show Strength Against Major Currencies Amid Growing UK Retail Sales

The British pound strengthened against major currencies during Thursday’s European session, buoyed by improved investor sentiment following developments in France’s political crisis.

French President Emmanuel Macron is exploring ways to address the turmoil after Prime Minister Michel Barnier was ousted in a no-confidence vote over a budget dispute.

Barnier is expected to resign later today, marking him as the shortest-serving prime minister in modern French history.

France may face weeks or months without a functioning government until Macron appoints a new prime minister to form a cabinet. While the 2025 state and social security budgets remain unapproved, constitutional provisions will likely prevent a U.S.-style government shutdown.

Meanwhile, U.S. Federal Reserve Chair Jerome Powell struck a slightly hawkish tone during his speech at the New York Times DealBook Summit. Powell highlighted the resilience of the U.S. economy and noted diminished labor market risks.

However, weaker-than-expected private sector employment and service sector data tempered the dollar, fostering optimism about potential interest rate cuts.

Markets are now pricing in a 75.5% probability of a 25-basis-point rate cut at the Federal Reserve’s December 17–18 meeting, according to CME Group’s FedWatch Tool. U.S. weekly jobless claims data and the closely watched monthly jobs report on Friday may further influence sentiment.

During European trading, the pound rose to three-day highs of 1.2740 against the U.S. dollar and 1.1264 against the Swiss franc, recovering from earlier lows.

It also strengthened to 0.8273 against the euro and 191.21 against the yen. Resistance levels are projected at 1.30 against the greenback, 1.14 against the franc, 0.80 against the euro, and 198.00 against the yen.

Conclusion

The British pound’s rally reflects improved investor sentiment amid global economic and political developments. While uncertainty in France and U.S. monetary policy remain in focus, the pound could continue its upward trend if conditions stabilize. However, traders should remain cautious amid potential volatility tied to upcoming data releases.

Insight from RTTNews

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