Sterling's Shifting Fortunes Amid Global Currency Dynamics

The British pound gained modestly in a shortened trading session but faces an uncertain future due to diverging global monetary policies. Sterling's performance in 2024 has been strong against major currencies but could be impacted by changing economic conditions and political factors, including Donald Trump's election victory.

The British pound showed modest gains during a holiday-shortened trading session, but experts warn of uncertainty ahead as global monetary policies diverge.

Sterling rose 0.1% to $1.2544 but recorded a loss for December. It gained 4% against the euro this year, nearing its Brexit vote value from 2016.

Despite initial strong performance, the pound faces challenges, partly due to Donald Trump's U.S. election victory and Britain's upcoming tax-heavy budget, which could alter the economic landscape for sterling.

(With inputs from agencies.)