Pound Sterling Skyrockets vs US Dollar amid Ukraine Peace Hopes

March 3, 2025 - Written by Ben Hughes

STORY LINK Pound Sterling Skyrockets vs US Dollar amid Ukraine Peace Hopes

The Pound US Dollar exchange rate jumped up on Monday as a significant upbeat market mood bolstered the exchange rate.

At the time of writing, GBP/USD was trading at approximately $1.2704, virtually up roughly 1% from the start of Monday’s session.

On Monday, the US Dollar (USD) plummeted against most of its major counterparts as a positive market sentiment, fuelled by European discussions of peace in Ukraine, took hold.

European leaders, including French President Emmanuel Macron, expressed optimism about a potential month-long ceasefire in Ukraine, boosting market spirits.

The ‘Greenback’s’ decline was further exacerbated by the release of the latest ISM manufacturing PMI data for the country, which came in lower than anticipated.

On Monday, the Pound (GBP) gained significant strength against most of its major counterparts, buoyed by the day's positive trading conditions that favoured risk-sensitive currencies.

The Pounds performance was bolstered by the market's optimistic mood following discussions of a European initiative to bring peace to Ukraine.

This positive sentiment supported the currency, even as some underwhelming UK data was released.

The UK's final manufacturing PMI for February declined further into contraction territory, dropping from 48.3 to 46.9, which was slightly better than the forecast of 46.4.

Looking ahead, the main driver for the Pound US Dollar exchange rate on Tuesday will likely be market sentiment, given the absence of any significant UK or US economic data releases.

If market mood turns negative, it could weigh on GBP/USD exchange rates.

However, if Monday’s positive sentiment persists, we could see the exchange rate continue to strengthen as we enter Tuesday's European trading session.

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TAGS: Pound Dollar Forecasts