Sterling Weakens as Hawkish Fed Signals Boost US Dollar
Sterling slipped back below the $1.34 level as hawkish remarks from Federal Reserve Governor Christopher Waller and stronger-than-expected US inflation data boosted demand for the US dollar. The decline follows a recent recovery in the pound, supported by easing concerns over AI and Middle East tensions, alongside falling oil prices, which weakened demand for the greenback and encouraged investors to move towards riskier assets. The dollar strengthened on Tuesday after Waller signaled the possibility of further interest rate increases and US consumer prices rose more than anticipated in October, reinforcing expectations of additional Federal Reserve monetary tightening in December. Meanwhile, investors are turning their attention to the UK's third-quarter GDP report, with third-quarter growth expected to reach 0.7%, driven by resilient services activity. Expectations of further Bank of England rate increases are providing some support to sterling, helping to limit its downside.
Sterling slipped back below the $1.34 level as hawkish remarks from Federal Reserve Governor Christopher Waller and stronger-than-expected US inflation data boosted demand for the US dollar. The decline follows a recent recovery in the pound, supported by easing concerns over AI and Middle East tensions, alongside falling oil prices, which weakened demand for the greenback and encouraged investors to move towards riskier assets.
The dollar strengthened on Tuesday after Waller signaled the possibility of further interest rate increases and US consumer prices rose more than anticipated in October, reinforcing expectations of additional Federal Reserve monetary tightening in December. Meanwhile, investors are turning their attention to the UK's third-quarter GDP report, with third-quarter growth expected to reach 0.7%, driven by resilient services activity. Expectations of further Bank of England rate increases are providing some support to sterling, helping to limit its downside.