British Pound’s Rally Masks Underlying Dollar Weakness
The British pound surged to $1.36 against the U.S. dollar, marking an 8.7% year-to-date gain and hitting a three-year high. Yet the celebration is tempered—this rally reflects dollar fragility more than sterling strength.
Janet Mui of RBC Brewin Dolphin frames it bluntly: "The relative strength of the pound has been more of a weak U.S. dollar story this year." Trump's erratic trade policies and declining confidence in American assets have accelerated de-dollarization debates globally.
Meanwhile, the pound tells two tales. It's down 2.9% against the euro in 2024, exposing the duality of its performance. Investors still recall 2022's crash under Liz Truss, whose mini-budget debacle sent UK assets spiraling—a ghost that lingers in today's currency movements.
