Sterling Eases as Markets Increase BOE Rate Hike Bets
The British pound slipped slightly against the US dollar on Tuesday after rising above 1.34 during Asian trading, as investors increased expectations for further Bank of England interest rate hikes. Higher oil prices, with crude trading above $72 per barrel after attacks near the Strait of Hormuz, lifted inflation concerns, while markets priced a 76% chance of a year-end hike. Bank of England Governor Andrew Bailey said inflation still appears on course to reach the 2% target later than expected and dismissed the possibility of near-term interest rate cuts. Political attention remained on Andy Burnham, the leading contender to replace Keir Starmer, who has not named a finance minister, while sterling held firm, suggesting markets had largely absorbed recent political uncertainty. At the time of writing, GBP/USD was trading at 13385, down 0.03%, while United Overseas Bank predicted that "GBP could strengthen toward 1.3410; the next major resistance at 1.3445 is likely out of reach. "
The British pound slipped slightly against the US dollar on Tuesday after rising above 1.34 during Asian trading, as investors increased expectations for further Bank of England interest rate hikes.
Higher oil prices, with crude trading above $72 per barrel after attacks near the Strait of Hormuz, lifted inflation concerns, while markets priced a 76% chance of a year-end hike.
Bank of England Governor Andrew Bailey said inflation still appears on course to reach the 2% target later than expected and dismissed the possibility of near-term interest rate cuts.
Political attention remained on Andy Burnham, the leading contender to replace Keir Starmer, who has not named a finance minister, while sterling held firm, suggesting markets had largely absorbed recent political uncertainty.
At the time of writing, GBP/USD was trading at 13385, down 0.03%, while United Overseas Bank predicted that "GBP could strengthen toward 1.3410; the next major resistance at 1.3445 is likely out of reach. "