The pound sterling It hit more than a year highs against the dollar on Monday as the greenback started the week under pressure, with traders betting it could have peaked along with US interest rates.
The pound reached $1.2668, its highest price since April 2022, and subsequently traded slightly below that level, up 0.26 percent.
The pound is in the spotlight this week earlier than expected rate hike from the Bank of England on Thursday, and has also firmed against the euro.
The common European currency was last trading at 87.23 pence, after falling to 87.11 pence on Friday, its lowest level against the British currency so far this year.
Against the dollar, however, the euro it has rebounded nearly 16% from September lows, and was up 0.29% at $1.10505, supported by expectations that the European Central Bank will keep interest rates high for longer than the US Federal Reserve.
Last week, the Federal Reserve raised rates 25 basis points, but was somewhat more cautious than its peers on the outlook, brushing aside guidance on the need for future hikes.
US interest rate futures price the possibility of a rate cut in July at one-third, according to CME’s FedWatch tool, despite stronger-than-expected jobs data released on Friday.
The dollar index, which measures the performance of the greenback against a basket of six currencies, fell 0.25% to 101.06 points. Last month it stood at 100.78, its lowest level in a year.
On the other hand, the dollar appreciated 0.1% against the yen to 135.02 yen, although it fell 0.24% against the Swiss franc, the other traditional safe haven value, at 0.8885 francs.
