Sterling steady as traders await BoE, nervously watch midterms
EWU•Sterling held steady against the dollar at $1.3414 and was a fraction firmer against the euro at 83.35 pence as traders awaited the Bank of England's Thursday meeting and watched the U.S. midterm elections.
1. Sterling holds steady
The pound was flat against the dollar at $1.3414 and traded at 83.35 pence per euro, close to an 18-month high reached last week. Traders avoided large bets ahead of the U.S. midterms and the Bank of England's meeting on Thursday.
2. Rate decision in focus
The Bank of England's Monetary Policy Committee is expected to raise interest rates for the first time since August 2023. UK inflation is already 3.5%, and markets are pricing in three further rate rises next year after a possible move this week, though some analysts consider that pricing excessive. MUFG's Henry Cook expects one more hike in February, while BMO's Mark McCormick expects the central bank to push back against market expectations.
