Pound's Weekly Surge Amid Dollar Weakness

The British pound is on track for its largest weekly gain since mid-September, buoyed by a weakening dollar. Despite limited domestic influences, sterling has strengthened against other major currencies due to steady economic growth and inflation metrics. Global financial markets remain cautious as higher trade barriers pose potential risks.

The British pound held firm on Friday, setting it up for a significant weekly increase not seen since mid-September, as the dollar retreated from its recent highs.

Early trading had sterling reaching a two-week milestone at $1.275, with a weekly gain of 1.2%. The euro remained stable against the pound at 83.21 pence. The dollar's decline followed diminishing bond yields after President-elect Donald Trump named hedge fund manager Scott Bessent as Treasury secretary, calming fears about his policy agenda.

Though Brexit concerns did little to sway the pound, economic growth and robust inflation figures have shielded it from major downturns, leading to speculation about future Bank of England rate cuts. Mortgage approvals hit a high last month, despite slower consumer credit growth, amidst looming concerns about trade barriers and their effects on global markets.

(With inputs from agencies.)