Global Currency Markets Shake as Sterling Hits Seven Month High Against Weakening Dollar

The British pound sterling advanced to a seven-month peak against the US dollar today, while gold prices surged beyond $3,500 per ounce amidst growing market uncertainty triggered by President Trump’s criticism of the Federal Reserve.

Sterling climbed above $1.34 before settling at $1.338, marking its most sustained rally against the greenback since 1971. The pound also strengthened against the European single currency, rising 0.12 per cent to €1.163.

The London markets demonstrated resilience despite global turbulence, with the FTSE 100 advancing 0.48 per cent to 8,316.30 points. Continental bourses struggled to maintain momentum, as the pan-European Stoxx 600 shed 0.65 per cent, whilst Germany’s DAX and France’s CAC 40 experienced modest declines.

Market sentiment deteriorated following Trump’s social media outburst, where he branded Federal Reserve Chairman Jerome Powell “a major loser” and demanded interest rate cuts to prevent economic slowdown. The escalating rhetoric prompted significant selling pressure on Wall Street, with the S&P 500 dropping 2.36 per cent.

Deutsche Bank analysts highlighted growing investor anxiety regarding Federal Reserve independence, noting that recent market movements reflect mounting concerns over political interference in monetary policy. The precious metals sector benefited from the uncertainty, with gold trading at $3,469.13 per troy ounce.

Oil markets showed signs of recovery, with Brent Crude gaining 1.09 per cent to reach $66.98 per barrel, though prices remain significantly below their year-opening levels. The cryptocurrency market maintained its upward trajectory, with Bitcoin appreciating 1.06 per cent to $88,429.