The British pound traded at 1.3631 against the U.S. dollar on Monday, down 0.10% at 04:40 ET, as the greenback softened amid shifting U.S. policy expectations and geopolitical developments.
Sterling’s decline mirrored broader dollar weakness, with the DXY Dollar Index consolidating in a 98.50–99 range as markets awaited fresh signals from Washington. ING’s Global Head of Markets Chris Turner noted that while the dollar’s recent selloff may have room to extend, the firm remains cautious about calling a definitive bottom in the currency’s decline. The euro, meanwhile, held at 1.1665, down 0.10%, with ING identifying support at 1.1660–1.1670.
Market sentiment was driven by anticipation of U.S. Treasury Secretary Scott Bessent’s expected announcement of new sanctions on Iran, scheduled for later on Monday. Analysts also cited broader U.S. policy dynamics—including potential fiscal consolidation measures, renewed trade tensions with Canada, and the possibility of tariff escalations—as factors weighing on the dollar. Turner emphasized that these developments could further test the Fed’s commitment to inflation control, particularly ahead of remarks by Federal Reserve official Kevin Warsh at the Jackson Hole symposium on Friday.
ING maintained its forecast for the euro to reach 1.17 by the end of September and 1.18 by year-end, though the bank noted that these targets remain subject to review. The firm’s projections followed data showing asset managers and leveraged funds building long positions in the euro, though speculators remained underweight on the single currency according to Chicago futures positioning.
Looking ahead, traders will focus on Tuesday’s Germany August IFO survey, Wednesday’s U.S. core PCE inflation reading for July, and Friday’s Jackson Hole keynote by Warsh for further direction. Sterling’s movement on Monday was not driven by UK-specific fundamentals, underscoring the broader dollar-driven narrative shaping currency markets.
