Sterling Firms at 3-Month High

2026-08-19 08:29 By Agna Gabriel 1 min. read

The British pound strengthened to around $1.356, remaining close to a three-month high as investors assessed the latest UK inflation and labour-market data.

Consumer inflation accelerated to 2.9% in July from 2.6% in June, matching expectations, while core inflation remained unchanged at 2.6%.

The figures prompted traders to modestly reduce expectations for a Bank of England rate hike later this year.

Earlier labour-market data showed unemployment holding at 4.9%, above forecasts, while payroll employment declined by 86,000 year-on-year.

Regular earnings growth remained relatively firm at 3.5%.

Despite signs of resilience in the UK economy, elevated oil prices and uncertainty surrounding the US-Iran conflict continue to pose risks to the inflation outlook.

Meanwhile, the dollar index remained near multi-month lows, providing additional support to sterling.

Softer US economic data led investors to scale back expectations for further Federal Reserve tightening, weighing on the dollar.



News Stream
Sterling Firms at 3-Month High
The British pound strengthened to around $1.356, remaining close to a three-month high as investors assessed the latest UK inflation and labour-market data. Consumer inflation accelerated to 2.9% in July from 2.6% in June, matching expectations, while core inflation remained unchanged at 2.6%. The figures prompted traders to modestly reduce expectations for a Bank of England rate hike later this year. Earlier labour-market data showed unemployment holding at 4.9%, above forecasts, while payroll employment declined by 86,000 year-on-year. Regular earnings growth remained relatively firm at 3.5%. Despite signs of resilience in the UK economy, elevated oil prices and uncertainty surrounding the US-Iran conflict continue to pose risks to the inflation outlook. Meanwhile, the dollar index remained near multi-month lows, providing additional support to sterling. Softer US economic data led investors to scale back expectations for further Federal Reserve tightening, weighing on the dollar.
2026-08-19
Sterling Falls from 3-Month High
The British pound eased to around $1.352, down from an over three-month high of $1.354 hit on Monday, as signs of a cooling UK labour market weighed on the currency. Unemployment remained at 4.9% in June, above expectations for 4.8%, while job vacancies fell to 707,000 in the three months to July, their lowest level since 2021. Private-sector regular pay growth also slowed to 2.8% year-on-year, its weakest pace since late 2020. The softer labour market strengthens the case for the Bank of England to keep rates unchanged, although markets are still pricing some monetary tightening by year-end. Markets will now focus on inflation data on Wednesday. Meanwhile, renewed US-Iran tensions pushed oil prices higher and supported the dollar as investors sought safety. Despite Tuesday’s decline, sterling remains slightly higher year-to-date, helped by broader dollar weakness, reduced expectations for Federal Reserve rate hikes and relatively contained oil prices.
2026-08-18
Sterling Climbs to Over 3-Month High
The British pound strengthened to around $1.355, its highest level in more than three months, as investors positioned ahead of a busy week of UK economic data. Markets will first focus on labour market figures due Tuesday, followed by inflation data on Wednesday. Headline inflation is expected to accelerate to a four-month high, although the core rate may ease. Markets are currently fully pricing in a 25-basis-point BoE rate increase in December, with further moves dependent on the inflation trajectory. The central bank left rates unchanged in July, while Governor Andrew Bailey said the disinflation process remained on track despite persistent external risks. However, the prolonged conflict in the Middle East could keep energy prices elevated and add to inflationary pressures. Meanwhile, expectations for a September Federal Reserve rate hike continue to decline.
2026-08-17