Finance
Sterling sags as traders await key data
Published by Global Banking & Finance Review®
Posted on January 5, 2026
2 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on January 5, 2026
2 min readLast updated: January 20, 2026
Sterling weakens as traders focus on upcoming US employment and euro zone inflation data. Bank of England likely to cut rates further.
LONDON, Jan 5 (Reuters) - The pound eased against the dollar on Monday, as the greenback headed for a fifth daily rise in a row against a basket of major currencies ahead of a wave of economic data that could set the tone for trading over the near term.
Currency traders said they were keeping an eye on developments in Venezuela, but were more immediately focussed on U.S. employment data, euro zone inflation and UK monthly business activity figures due this week.
Sterling was last down marginally at $1.3461, having ended last week with a 0.3% loss. The pound rose by nearly 8% against the dollar in 2025, marking its strongest annual performance since 2017.
"The pound's weakness reflects broader dollar strength rather than UK-specific concerns, though the move does impact returns for investors holding overseas assets," IG chief markets strategist Chris Beauchamp said.
Against the euro, the pound was a touch stronger, leaving the single European currency down 0.34% on the day at 86.77 pence.
The Bank of England, which cut rates by a quarter point last month, is expected to deliver at least one more rate cut this year, with a strong possibility of a second by year-end, according to money markets.
(Reporting by Amanda Cooper; Editing by Andrew Heavens)
Foreign currency refers to any currency that is not the domestic currency of a particular country. It is used in international transactions and can fluctuate in value against other currencies.
The UK economy encompasses the economic activities and financial systems of the United Kingdom, including its production, consumption, and trade of goods and services.
Financial markets are platforms where buyers and sellers engage in trading financial assets such as stocks, bonds, currencies, and derivatives, facilitating the exchange of capital and risk.
Currency trading, or forex trading, involves buying and selling currencies in the foreign exchange market to profit from changes in exchange rates.
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