The pound sterling remained stable on Thursday, approaching its lowest level in a month against the dollar, as traders remained cautious and awaited market-moving US inflation data, which is expected later in the year. daytime.
Sterling held steady at $1.3076, up marginally from Wednesday’s low of $1.3057, its lowest level since September 12.
The U.S. economy and the dollar have been drivers of global markets over the past week, after the much stronger-than-expected September jobs report prompted investors to withdraw their bets on a further decline significant increase in interest rates from the Federal Reserve.
As markets recalibrated, U.S. bond yields rose relative to those of other countries, boosting the dollar’s appeal.
“Market expectations for the Fed’s final rate for this round of easing have been revised upwards by 50 basis points in recent weeks,” said Chris Turner, global head of markets at ING. “And short-term yields have moved significantly in favor of the dollar.
The pound performed better against the euro, reflecting the relative strength of the UK economy compared to that of the eurozone.
Germany’s economy is expected to contract by 0.2% in 2024, the economy ministry said on Wednesday, which would mark the second consecutive year of falling output.
The euro has lost around 1% against the pound over the past month and was trading lower again on Thursday, at 83.60 pence.
Foreign exchange markets remained subdued ahead of the release of the US Consumer Price Index for September, due at 12:30 GMT, which is expected to show inflation slowing to 2.3% from 2.5% in August, according to economists polled by Reuters.
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