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Pound Strengthens As Ukraine Peace Plan Boosts Investor Risk Appetite
Monday, 3 March 2025 18:43 WIB | GBP/USD |GBP/USD

The pound (GBP) traded higher against other major currencies, except the euro, at the start of the week on the back of a potential Russia-Ukraine ceasefire. Over the weekend, United Kingdom (UK) Prime Minister Keir Starmer said European leaders had agreed to present a peace plan to Washington. The meeting between European leaders and Starmer was also attended by Ukrainian President Volodymyr Zelenskyy, which could be a major positive step towards ending the three-year war in Ukraine. Technically, signs of easing geopolitical tensions have boosted demand for riskier assets.

In addition, strong expectations that the Bank of England (BoE) will follow a moderate policy easing cycle and the possibility of a healthy trade deal between the US and the UK have kept the British currency ahead. On Friday, BoE Deputy Governor Dave Ramsden said that the central bank should maintain a "cautious and gradual" approach to monetary policy expansion amid uncertainties over the labor market and global trade.

Ramsden warned that inflationary pressures remain high due to persistent wage growth. "I no longer think the risks to achieving the 2% inflation target sustainably over the medium term are to the downside," Ramsden said, adding that the trade has fully priced in two rate cuts this year. (Newsmaker23)

Source: FXstreet

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