Sterling posts strongest weekly gain as dollar weakens

The British pound posted its strongest weekly gain against the U.S. dollar in three months, buoyed by easing domestic political concerns and a weaker greenback following disappointing American labor market data. For the week ending Friday, July 3, sterling advanced approximately 1.2 percent, trading near 1.3357.

The currency's performance was driven by two primary factors. In the United States, a softer-than-expected Nonfarm Payrolls report for June showed the economy added just 57,000 jobs, well below market expectations. This data revived investor doubts that the Federal Reserve would raise interest rates at its September meeting, leading to broad selling pressure on the dollar.

Concurrently, political uncertainty in the United Kingdom diminished. Markets had been unsettled by the Labour Party leadership contest triggered by Prime Minister Keir Starmer's resignation in late June. Greater Manchester Mayor Andy Burnham, seen as a frontrunner, had previously made remarks that raised investor concerns about a potential departure from existing fiscal rules and borrowing pledges. However, his subsequent commitment to maintaining the country's current fiscal framework, which includes...