Sterling Slides on BoE Activism and Middle East Tensions

The British pound suffered a significant drop following comments by Bank of England Governor Andrew Bailey about potential interest rate cuts. This decline was exacerbated by ongoing Middle East tensions, which bolstered the dollar. U.S. job market strength has also influenced Federal Reserve interest rate decisions.

The British pound declined sharply on Thursday after comments by Bank of England Governor Andrew Bailey suggested that the central bank might take a 'more activist' approach to interest rate cuts. This comes amid ongoing tensions in the Middle East, which have kept the U.S. dollar strong.

The pound was last reported down by 0.75% at $1.3169, marking its lowest point since September 19. Meanwhile, euro/sterling increased to 83.83 pence, a 0.7% rise. The dollar reached a one-month peak as investors turned to safe-haven assets.

U.S. employment data released on Wednesday pointed to robust job market conditions, reinforcing the perception that the Federal Reserve isn't in a hurry to reduce interest rates.

(With inputs from agencies.)