Sterling edged lower on Tuesday, trading about 0.19% down against the dollar near $1.3317 at 09:57 GMT, while the euro was up roughly 0.27% at $1.1143. The pound lagged most major currencies, with GBP/NZD among the weakest crosses; GBP/JPY rose about 0.18% to around 210.30.
Budget and Fed on Wednesday
Chancellor John Healey delivers the UK Budget on Wednesday, the same day as the Fed decision. Press reports suggest he may add around GBP 20 billion of investment over five years, which Deutsche Bank said would remove one large tail risk for Budget Day. Gilt and sterling reaction will depend on the OBR forecasts and financing plans.
Rate expectations
- Bank of England: markets price a 25 basis point hike to 4% in November with strong confidence.
- ECB: expected to hold rates on Thursday.
- French spreads: about 153 basis points over Germany, which ING said would need to widen significantly to trigger another large euro drop.
Levels cited by analysts
HSBC put GBP/USD support at $1.3175 and resistance at $1.3461, and EUR/USD resistance at $1.1257. Today's US calendar includes Conference Board consumer confidence (ING expected 81.5; consensus 81.0), durable goods, new home sales and the Richmond Fed index.
For how expectations shape currency moves, see interest rate expectations and currencies. This is market information only, not a trading recommendation.