The GBP rose 0.2% against the dollar, continuing to rise on positive sentiment and stronger-than-expected economic data. The report emphasized that the market is focused on the upcoming BoE policy decision, not expecting any changes. Political developments pose risks to the pound as leadership challenges emerge. Shaun Osborne and Eric Theoret from Scotiabank.

GBP strengthens amid positive sentiment

“As with the EUR, it appears that sterling’s recent rally has been driven primarily by sentiment, with additional support from fundamentals on the back of stronger-than-expected retail sales and last Friday’s PMI.”

“A political fallout remains the main risk for the pound as market participants consider the continued threat of a leadership challenge to Prime Minister Starmer.”

(This article was created with the lend a hand of an artificial intelligence tool and has been reviewed by an editor.)