Stefano Rebaudo

Sterling fell versus the dollar before the Federal Reserve's policy meeting later on Wednesday, which could suggest a less aggressive monetary easing path in the U.S., while British inflation figures were in line with analyst expectations.

French debt risk premiums versus safe-haven German Bunds fell on Friday, after French President Emmanuel Macron said he would appoint a new prime minister in the coming days and his top priority would be getting a 2025 budget adopted by parliament.

The risk premium investors demand to hold French debt rather than German bunds dropped on Thursday on optimism that France will be able to pass a budget, while German bunds fell on reports Europe plans to tap bond markets for a defence fund.

The risk premium investors demand to hold French debt rather than German Bunds dropped from its highest levels in over 12 years on Thursday after the widely expected collapse of the French government.

Sterling dropped versus the dollar and rose against the euro on Monday, with political troubles in France and the so-called Trump trade back in focus.

Sterling rose against the dollar and was little changed versus the euro on Wednesday, with investors focused on the market reaction to U.S. President-elect Donald Trump's tariff promises.

The pound dropped to multi-week lows versus the yen and the Swiss Franc as investors rushed into safe-haven assets, after a warning from Russia over its updated nuclear doctrine.

Sterling was within striking distance of its highest level in more than 2-1/2 years against the euro on Friday as investors bet the European Central Bank would follow a faster monetary easing path than the Bank of England.

The pound was on track for its biggest monthly fall since September 2023 against the dollar while being roughly unchanged versus the euro with markets focused on major central banks' monetary easing paths.

Rating agency Moody's will review France's sovereign rating on Friday in what could be the next test of sentiment for bond investors.