Improved UK political risk perception and supportive yield spreads drive the pound toward multi-month highs against the dollar.
The British pound (GBP) is consolidating near the top of its one-month and multi-month ranges, with resistance eyed around 1.3600 against the US dollar (USD). Fading downside risk reversals and a tighter correlation to sentiment have supported the currency’s recovery, reflecting reduced concerns over UK political risks.
Technical indicators remain constructive, with GBP/USD approaching its mid-July peak in the mid-1.35s and the upper end of its range since mid-February. Support levels are seen in the mid-to-lower 1.34s, while yield spreads have turned slightly more favorable for sterling following a late-July pullback.
A light economic calendar ahead of Thursday’s Q3 GDP data and June trade figures may limit near-term volatility, though the pound’s technical setup suggests potential for further gains.