Pound's 1.36 Ceiling Threatens Sterling Rally

The British pound's recent surge against the US dollar is facing a significant hurdle at the 1.36 level, according to currency strategists at Scotiabank.

This threshold has historically capped gains and is expected to trigger selling pressure as sterling approaches it.

The call comes as the pound benefits from a weaker dollar, with traders reassessing the Federal Reserve's policy trajectory and market expectations of the Bank of England's cautious approach to interest rate cuts.

However, Scotiabank's analysis points to a gloomy UK growth outlook and persistent inflationary pressures that will limit any sustained rally beyond the key technical barrier.