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The pound continued its upward trajectory on Friday morning, heading higher against the dollar (GBPUSD=X) to trade just below the $1.335 mark.
“The pound has jumped to its highest level on the dollar since late-October this week, having posted its biggest daily gain since April on Wednesday,” said Matthew Ryan, head of market strategy at global financial services firm Ebury.
“The upward revision to the November PMI [purchasing managers’ index] figures has raised hopes that Britain’s economy is not slowing by quite the extent that market participants had feared, albeit with the caveat that we’re still looking at relatively muted levels of growth, way below where policymakers would hope that we’d be.”
For the year-to-date sterling is now almost 6.4% higher against the dollar.
“Focus will quickly shift to the December meeting of the Bank of England, with another 25 basis point cut already almost entirely baked in by markets. Focus surrounding the decision will instead be on where the bank sees rates going in 2026,” added Ryan.
The dollar index (DX-Y.NYB), which tracks the greenback against a basket of currencies, was flat.
The pound also strengthened against the euro, heading 0.1% higher, to the 1.145 euro per pound mark.
Oil prices headed higher on Friday following a busy week for the commodity, as traders parse expectations of a US Federal Reserve interest rate cut as well as stalling Ukraine-Russia peace talks.
Vladimir Putin is in India meeting president Narendra Modi on Friday, as the war continues on Ukrainian soil. Oil is an important part of the trading relationship between Russia and India. Since the Ukraine war, India has upped its purchase of discounted Russian crude.
India’s annual imports rose from 2% in 2021 to almost 40% in the last three years, according to Sky News.
In August, Donald Trump slapped another 25% punitive tariff on India for buying Russian oil, taking the total duties to 50%.
A Russia-Ukraine peace deal could help restore the flow of Russian oil to other parts of the world.
Brent crude futures (BZ=F) rose 0.1% to the $62.95 mark, while West Texas Intermediate (CL=F) gained 0.1% to hit $59.74.
Weakness in the dollar also spurred on prices, as a lower greenback makes crude cheaper for buyers in other currencies.
Gold prices gained on Friday, recovering after a subdued day of trade on Thursday as caution returned to markets.
The price increase came as traders watch closely for data that could impact the US Federal Reserve’s next interest rate decision. Figures tracking personal consumption expenditures (PCE) are due to be released later on Friday, a preferred gauge of spending by the central bank.
Investors continue to bet heavily on a quarter-point rate cut from the Fed next Wednesday. Fed funds futures imply 87% odds of easing, compared with 62% a month ago, according to CME FedWatch.
Earlier this week, the World Gold Council stated that prices could rise by between 15% and 30% in 2026.
It said investment demand, particularly via gold (GC=F) exchange-traded funds (ETFs), would remain a key driver, offsetting weakness in other areas such as jewellery or technology.
“The combination of falling yields, elevated geopolitical stress and a pronounced flight-to-safety would create exceptionally strong tailwinds for gold (GC=F), supporting a sharp move higher. Under this scenario gold could surge 15-30% in 2026 from current levels,” the WGC report said.