Pound hits four-year high against dollar, prompting calls to 'buy now'

"Sterling has surged to $1.38 against the US dollar, its strongest level since October 2021, as a combination of US economic disruption, shifting interest rate expectations and geopolitical uncertainty weakens the greenback. Currency analysts said the move has been driven more by dollar softness than by a sudden strengthening of the pound, creating what some describe as a rare buying opportunity for consumers and businesses needing US currency."

""The pound's climb to $1.38 is being driven by US dollar weakness and UK rate expectations," he said. "Investors are moving away from the dollar due to concerns over trade tariffs and the independence of the Federal Reserve. "Meanwhile, persistent UK inflation suggests the Bank of England may keep rates higher for longer, which attracts global capital. While some are eyeing a move towards $1.40, the rally may be nearing its peak as traders start taking profits.""

Sterling has surged to $1.38 against the US dollar, its strongest level since October 2021. The rise reflects pronounced US dollar weakness rather than a sudden strengthening of the pound, creating a buying opportunity for those needing dollars. Heavy snowfall and ice from Winter Storm Fern disrupted US economic activity, leaving almost 600,000 homes without power, cancelling thousands of flights and potentially shaving up to 1.5% off first-quarter US GDP. Markets are increasingly pricing in lower US interest rates later this year, reducing the dollar's yield advantage versus sterling. Heightened political uncertainty and record-high commodity prices have pushed investors away from the dollar, while persistent UK inflation and expectations of higher Bank of England rates have attracted capital to sterling, even as some traders consider taking profits.

Read at Business Matters