The British pound rose on Tuesday, boosted by an improvement in risk appetite as Rishi Sunak prepares to take over as Britain's prime minister, while the euro stabilized ahead of the European Central Bank's expected rate hike next Thursday.
The dollar rose slightly, but did not move away from its lowest level in the current October, amid indications that the US Federal Reserve (the central bank) raise interest rates is slowing the largest economy in the world.
The British Prime Minister announced on Monday that Sunak will become Britain's next prime minister, and he is scheduled to meet King Charles III today before speaking in front of 10 Downing Street.
British government bonds continued to recover, and 20-year bonds returned to a level not reached since last September 23, the day when former Prime Minister Liz Terrace's economic agenda led to the collapse of sterling-denominated assets.
And the sterling is heading to record its highest level this month, and rose 0.3% to $1.13125 at 08:25 GMT, before continuing its upward journey.
However, currency experts expect the currency - which has fallen more than 16% against the dollar this year - to remain under pressure.
The euro is falling a little
As for the euro, it fell 0.07% to $0.9866, but it is not far from its highest level since early October, at a time when the European Central Bank appears ready to raise interest rates by 75 basis points next Thursday to curb high inflation.
The dollar index - which measures the US currency against 6 other major currencies - rose 0.13% to 112 points.
The yen stabilized at around 149 against the dollar after an intervention believed to have been made by the Bank of Japan on Friday and Monday.
The Finance Ministry declined to comment on whether it had ordered the intervention in recent days, although it had previously confirmed the intervention last September, the first purchase of the yen by Japanese authorities since 1998.
While the yuan fell to a 15-year low on Tuesday, it fell offshore to a record low of 7.3650 per dollar.