Sterling slips as oil slides, US rate hike bets grow
TLT•Euro unchanged against sterling
The pound was largely unchanged against the euro EURGBP= at 0.855 after retreating 1.1% from last week's one-year high.
Sterling falls to more than three-week low
Sterling fell to a more than three-week low against a stronger dollar on Tuesday as lower oil prices eased inflation concerns, while expectations of a U.S. interest rate hike this week continued to support the greenback.
The pound traded near its weakest level since early July at $1.327 on Tuesday, down 0.1% on the day.
Oil, rates and policy expectations pressure the pound
Brent crude fell 2.6% to $86.08 a barrel, extending its pullback from last week's spike above $100, amid growing hopes of a resolution to the U.S.-Israeli war on Iran after U.S. President Donald Trump said Washington was having "good talks" with Tehran.
Rate-sensitive 2-year gilt yields retreated 3 bps to 4.352%.
The Federal Reserve wraps up its two-day policy meeting on Wednesday, with traders pricing in a nearly 40% chance of a 25-basis-point rate hike, up from about a week earlier, according to LSEG data. U.S. rate futures show of a quarter-point increase by September.
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