LONDON: The pound rose on Friday nearing its highest in almost three months, lifted in part by a broad-based retreat in the dollar, but also by a rise in UK bond yields after this week’s budget update included a forecast of higher government debt issuance.

Also bullish for sterling was a reading of consumer confidence on Friday that showed people in Britain turned more optimistic about the outlook for the economy and their personal finances this month, although sentiment is a long off where it was before COVID struck in early 2019.

Sterling rose to a high of $1.2575 on Thursday, taking advantage of lower trading volumes because of the US Thanksgiving holiday to make inroads against the dollar.

By Friday, the pound traded around $1.257, up 0.28%. Against the euro, sterling was up 0.2% at 86.84 pence.

Currency markets are caught up in shifting expectations for the timing of the first central bank rate cuts.