Sterling Remains Under Pressure Despite Strong UK GDP
Sterling remained under pressure, trading below the $1.33 level and hovering near its lowest point since mid-October, as investors digested stronger-than-expected UK economic data, while the US dollar continued to draw support from expectations of further Federal Reserve tightening. Oil prices also stabilized, with Brent crude recovering momentum after recent steep declines. ONS data showed the UK economy grew by 0.7% in the third quarter, up from 0.5% in the previous quarter and in line with expectations. Annual growth accelerated to 1.9% from 1.4%, while September GDP rose 0.2%, exceeding forecasts. The resilient data strengthened expectations of further Bank of England tightening, with markets pricing in another rate hike before year-end and a further increase by March. In the US, stronger-than-expected inflation and hawkish Fed commentary reinforced expectations of a December rate hike, while raising the possibility of a more aggressive 50-basis-point increase.
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Sterling remained under pressure, trading below the $1.33 level and hovering near its lowest point since mid-October, as investors digested stronger-than-expected UK economic data, while the US dollar continued to draw support from expectations of further Federal Reserve tightening. Oil prices also stabilized, with Brent crude recovering momentum after recent steep declines. ONS data showed the UK economy grew by 0.7% in the third quarter, up from 0.5% in the previous quarter and in line with expectations. Annual growth accelerated to 1.9% from 1.4%, while September GDP rose 0.2%, exceeding forecasts.
The resilient data strengthened expectations of further Bank of England tightening, with markets pricing in another rate hike before year-end and a further increase by March. In the US, stronger-than-expected inflation and hawkish Fed commentary reinforced expectations of a December rate hike, while raising the possibility of a more aggressive 50-basis-point increase.