Sterling nudges lower as Waller comments, US data underpin dollar
TLT•Sterling fell 0.3% to $1.3395 as hawkish comments from Federal Reserve Governor Christopher Waller and US inflation data supported the dollar. The pound also edged lower to 83.51 pence per euro, while investors awaited UK GDP data due Thursday.
1. Dollar gains on rates outlook
The pound nudged lower against the dollar on Tuesday after Waller argued for more rate hikes and US data showed consumer prices rose more than expected in October. Sterling was down 0.3% at $1.3395, after rising nearly 0.7% in the previous session.
2. Pound near euro highs
Sterling traded at 83.51 pence per euro, easing slightly from last week's 20-month high after the Bank of England raised interest rates. Lee Hardman, senior currency analyst at MUFG, said lower energy prices could prompt investors to reduce short euro positions and help the euro recover ground in the near term.
3. UK GDP in focus
Investors are watching for Britain's GDP data due Thursday. A survey of economists forecasts 0.7% quarter-on-quarter growth in the third quarter, up from the previous period. Hardman said the data would be unlikely to significantly alter the pound's performance unless it brought a major downside surprise.
