Pound hits highest since June, euro up as dollar under pressure
The pound rose to a new 10-month high against the dollar on Tuesday, and the euro reached its highest in two months, as the greenback continued to be hurt by market bets that the end of the U.S. rate-hiking cycle is near.
Sterling reached $1.2475, its highest since June 2022, and was last just below that level, up 0.4%.
The euro reached $1.0938, its most since early February, and was last up 0.17% at $1.0921.
“We’ve been saying that FX hasn’t really captured what’s been happening in rates, and there is scope still for the dollar to weaken a bit further,” said Derek Halfpenny head of research for global markets at MUFG.
“Short term spreads between core Europe and the U.S. are more consistent with euro-dollar trading near $1.10 to $1.15.”
U.S. and European government bond yields fell dramatically last month as investors rushed to buy safe haven assets due to fears about the banking sector, and while they have rebounded a little they remain well below recent highs.
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