The pound rallied to its highest level against the dollar for more than a year yesterday as traders bet on a Bank of England interest rate hike. Sterling also hit its highest level versus the euro so far this year amid market expectations that the 0.25 percentage point increase will not be the last. This appeared to bolster the chances that the US Federal Reserve is preparing to pause its aggressive cycle of interest rate increases. Analysts at US investment bank Citi this week said that they expect sterling to hit $1.30 versus the dollar. ‘Having been bullish on the pound since the start of the year, we no longer think the pound presents attractive risk-reward in the short term,’ he said.

Source: Daily Mail May 11, 2023 02:59 UTC