Sterling Falters as Interest Rate Outlook Weighs on Pound

The British pound's three-day winning streak against the US dollar came to an end on Monday as investors focused on the outlook for US interest rates and Japan's intervention efforts in the foreign exchange market.

Against the Japanese yen, sterling fell 0.50% to ¥211.11 after touching its lowest level since March 5 at ¥209.48. The pound had been under pressure last week following interventions by authorities in Tokyo and Washington aimed at supporting the yen.

The UK's new government has adopted a policy approach that is easing investor concerns, providing support for the currency despite the Bank of England's decision to leave interest rates unchanged last week.

UK Finance Minister John Healey stated that government departments would need to reduce their budgets to help finance the administration's spending commitments.