The British pound experienced steady growth on Monday, marking its strongest monthly performance against the U.S. dollar since late 2023. Investors penalized U.S. assets throughout April, boosting sterling by 0.3% to stand at $1.3345, aiming for a 3.1% gain in April, the largest monthly increase since November 2023.
In contrast, the euro appreciated by nearly 2% in April, registering its greatest monthly rise since December 2022, when it climbed 2.4% against the pound. The euro’s robust growth stems from investors shifting away from the dollar, benefiting most major cross rates.
Traders anticipate around 85 basis points in rate cuts by the Bank of England this year, mirroring cuts expected from the U.S. Federal Reserve. Analysts suggest that the UK’s relative insulation from tariffs could offset fiscal constraints, bolstering confidence in sterling’s future performance against the euro.
(With inputs from agencies.)