Pound Holds Near One-Month High
The British pound traded little changed above $1.33, near its strongest level in almost a month, as the US dollar retreated from recent highs after Federal Reserve Chair Kevin Warsh refrained from signaling the outcome of this month’s FOMC meeting, prompting markets to scale back expectations of a Fed rate hike next week. Meanwhile, traders have modestly increased bets on Bank of England rate hikes, with four quarter-point increases priced in by July and the first potentially coming as early as November. Investors are also positioning ahead of next week’s UK budget, with several major asset managers betting that fiscal discipline will support gilts. Bond demand could strengthen further if Chancellor John Healey reassures markets that government spending and borrowing will remain under control. On the data front, London property asking prices rose 2.5% in October, marking a second consecutive monthly increase, according to Rightmove.
The British pound traded little changed above $1.33, near its strongest level in almost a month, as the US dollar retreated from recent highs after Federal Reserve Chair Kevin Warsh refrained from signaling the outcome of this month’s FOMC meeting, prompting markets to scale back expectations of a Fed rate hike next week. Meanwhile, traders have modestly increased bets on Bank of England rate hikes, with four quarter-point increases priced in by July and the first potentially coming as early as November. Investors are also positioning ahead of next week’s UK budget, with several major asset managers betting that fiscal discipline will support gilts.
Bond demand could strengthen further if Chancellor John Healey reassures markets that government spending and borrowing will remain under control. On the data front, London property asking prices rose 2.5% in October, marking a second consecutive monthly increase, according to Rightmove.