Sterling drops against euro, dollar on Monday

Sterling fell 0.2 per cent to $1.3090 on Monday, continuing its decline after last week’s significant drop, the largest since April, following Bank of England Governor Andrew Bailey’s remarks about potentially aggressive cuts to borrowing costs.

The pound’s recent weakness reflects a substantial unwinding of net long positions amid geopolitical uncertainties and shifting central bank policies.

The euro gained 0.28 per cent against the pound, trading at 83.81 pence per euro, recovering some ground after Bailey’s comments prompted volatility.

The US dollar also edged down after Friday’s strong jobs data fuelled its previous rally. Analysts suggest that while sterling may face short-term volatility, its long-term outlook remains clouded by geopolitical headwinds and a perception of risk compared to safe-haven currencies like the dollar.

Upcoming UK economic releases, including jobs data and consumer price index reports, could influence market sentiment further.

Attribution: Reuters

Subediting: M. S. Salama