Pound Gains Against Dollar as US Rate Expectations Soften

The British Pound has made gains against several major currencies at the start of this week, including the US Dollar and Yuan. The improvement is largely driven by a softening of US rate expectations after last week's weak retail sales and consumer sentiment data. This has left the Dollar at its lowest level since early June.

The Pound is also being supported by stronger UK GDP data from last week. However, this week's labour-market and inflation data will be crucial in determining the future direction of the currency. If these numbers are softer than expected, it could put pressure on the Pound to fall back.

Oil prices have risen towards $89 per barrel, which is contributing to inflation concerns for energy importers. This has helped commodity currencies such as the Australian and Canadian Dollars, but also puts pressure on the Pound against these pairs.