FX.co ★ Sterling Near Multi-Year High as Dollar Weakens

Sterling maintained its position above $1.38, nearing its highest value since September 2021, as the US dollar continued its downward trend. This decline followed the Federal Reserve’s decision to keep interest rates unchanged, coupled with President Donald Trump’s indications that his administration is at ease with a weaker dollar. Fed Chair Jerome Powell noted a "clear improvement" in the US economic outlook, highlighting signs of stabilization in the labor market. However, these remarks did little to bolster the already lackluster dollar, which was burdened by concerns over the government shutdown, subdued consumer confidence, and persistent policy challenges in Washington, including renewed tariff threats and critiques of the Fed's autonomy. Meanwhile, in the UK, new data from the British Retail Consortium revealed increasing price pressures, amplifying worries about persistent inflation and potentially constraining the Bank of England’s ability to reduce interest rates in the near future.