The British pound strengthened on Tuesday, trading close to its highest level against the US dollar since late 2021, as sustained weakness in the dollar continued to influence global markets.

Sterling approached one dollar thirty-eight cents, reflecting a broader decline in the US currency against major peers.

The euro also gained ground, moving above one dollar nineteen cents, while the US Dollar Index extended recent losses.

The currency movements coincided with gains in UK equities.

The FTSE one hundred index advanced for a second session, supported by rises in banking and energy stocks, while commodity-linked shares showed mixed performance.

Investors monitored exchange rate developments alongside domestic inflation indicators and movements in government bond yields.

The weakening dollar has also been accompanied by rising demand for alternative assets.

Gold prices climbed to fresh record highs above five thousand dollars an ounce, while other major currencies, including the Japanese yen, strengthened against the dollar.

Shifts in foreign exchange markets have reflected changing investor expectations around global monetary policy, fiscal conditions and economic growth.

Market participants continued to assess the implications of currency volatility for trade, corporate earnings and inflation, as global capital flows adjusted to a changing international financial environment.