Pound Nears $1.37 as Dollar Softens and UK Political Risks Ease

2026-02-11 10:13 By Joana Ferreira 1 min. read

The British pound advanced toward $1.37, rebounding from recent volatility and edging closer to its late-January high of $1.387, as the US dollar weakened ahead of the closely watched January jobs report.

The data is expected to show a modest pickup in hiring, though uncertainty remains after several US officials, including White House economic adviser Kevin Hassett, warned that job growth could slow in the months ahead.

Sterling also found support as political tensions in the UK eased.

Prime Minister Keir Starmer secured backing from cabinet members and across the Labour Party following the resignation of his chief of staff, Morgan McSweeney, amid the Lord Peter Mandelson controversy.

Meanwhile, markets continued to price in further rate cuts from the Bank of England.

Although the central bank kept its benchmark rate unchanged at 3.75% in a split vote, policymakers adopted a more dovish tone, signaling that inflation is likely to move back toward the 2% target from April onward.



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Pound Nears $1.37 as Dollar Softens and UK Political Risks Ease
The British pound advanced toward $1.37, rebounding from recent volatility and edging closer to its late-January high of $1.387, as the US dollar weakened ahead of the closely watched January jobs report. The data is expected to show a modest pickup in hiring, though uncertainty remains after several US officials, including White House economic adviser Kevin Hassett, warned that job growth could slow in the months ahead. Sterling also found support as political tensions in the UK eased. Prime Minister Keir Starmer secured backing from cabinet members and across the Labour Party following the resignation of his chief of staff, Morgan McSweeney, amid the Lord Peter Mandelson controversy. Meanwhile, markets continued to price in further rate cuts from the Bank of England. Although the central bank kept its benchmark rate unchanged at 3.75% in a split vote, policymakers adopted a more dovish tone, signaling that inflation is likely to move back toward the 2% target from April onward.
2026-02-11
Sterling Holds Below Four-Year High Amid UK Political Uncertainty
The British pound traded near $1.365, remaining below the late-January peak of $1.387, its strongest level in more than four years, as investors assessed fresh political developments in the UK. Sterling came under pressure after Prime Minister Keir Starmer’s chief of staff, Morgan McSweeney, resigned amid the Lord Peter Mandelson scandal, fueling speculation about Starmer’s leadership. Tensions escalated when Scottish Labour leader Anas Sarwar publicly called for the prime minister to step down. However, support from cabinet members and across the Labour Party helped steady sentiment, suggesting Starmer has, at least for now, weathered the challenge. At the same time, rising expectations of further Bank of England rate cuts have weighed on the currency. Although the central bank left its benchmark rate unchanged at 3.75% in a split decision, policymakers struck a more dovish tone than expected, indicating that CPI inflation is likely to return toward the 2% target from April.
2026-02-10
Pound Holds Near $1.36 as Political Uncertainty and Rate-Cut Bets Weigh
The British pound steadied around $1.36, remaining below the more than four-year high of $1.387 reached at the end of January, as mounting political uncertainty and shifting monetary policy expectations pressured the currency. Turmoil intensified after Prime Minister Keir Starmer’s chief of staff, Morgan McSweeney, resigned over the weekend, fueling speculation about Starmer’s leadership. The Prime Minister is facing renewed calls to step down from within a restless Labour Party following controversy surrounding his appointment of Peter Mandelson as UK ambassador to the US, a decision that has drawn scrutiny over Mandelson’s past links to Jeffrey Epstein. At the same time, growing expectations of additional Bank of England rate cuts have added to downward pressure on sterling. Although policymakers held interest rates at 3.75% in a split vote, they adopted a more dovish tone than anticipated, signaling that CPI inflation is likely to return to the 2% target from April.
2026-02-09