The British pound edged higher toward $1.37, partially recovering from Wednesday's decline, as markets reacted positively to Prime Minister Keir Starmer's strong backing of Chancellor Rachel Reeves.

Starmer defended Reeves amid speculation about her future, attributing her emotional moment to a "personal matter" and affirming she would remain chancellor "for a very long time to come." His remarks helped ease investor concerns that a potential replacement might be less committed to fiscal discipline and more inclined toward increased borrowing.

Meanwhile, traders also digested comments from Bank of England officials. Speaking at the ECB Forum on Central Banking, Governor Andrew Bailey said it was too early to assess the inflationary impact of tariffs but reiterated that the direction of interest rates is "downwards." Separately, BoE policymaker Alan Taylor called for faster rate cuts, warning of an increased risk of a hard landing for the UK economy.

Source: Trading Economi