Sterling Hits New 16-Month High vs Euro on French Risks, BOE Rate Rise Bets
Dow Jones10-19
0909 GMT - Sterling rises to a 16-month high against the euro, reflecting French civil unrest and fiscal risks along with expectations the Bank of England could raise interest rates. "Swap markets' BOE rate expectations have remained elevated in recent weeks, with around 105 basis points of tightening priced into the curve for the coming year," Union Bank Privee's Peter Kinsella says in a note. However, event risks for sterling will come from U.K. employment data Tuesday and inflation data Wednesday. Higher unemployment or milder core inflation would lower rate expectations, he says. The euro falls to 0.8404 pounds, its lowest level since the end of May 2025, according to LSEG.
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