Nov. 4 Reuters The British pound bounced against a tepid dollar on Monday ahead of highstakes events this week that include U.S. elections and a Bank of England interest rate decision.
Sterling rose 0.4 to 1.297, coming off of its longest string of weekly losses in nearly six years.
It fell to a twoandahalf month low of 1.284 last week as British finance minister Rachel Reeves39; hightax, highspend and highborrowing budget plan sparked political and monetary uncertainty.
Alongside the budget, the Office for Budget Responsibility OBR trimmed its growth forecasts beyond 2025 and forecast UK inflation will average 2.6 in 2025, up from a previous forecast of 1.5 back in March, prompting traders to pare back their BoE rate cut bets.
In an actionpacked week, attention will be on both the Federal Reserve and the Bank of England policy meetings. Both central banks are widely expected to deliver a quarterpoint rate cut on Thursday respectively with the possibility of another similar move in December.
Investors will pay particular attention to comments from BoE Governor Andrew Bailey to see if he offers any view on the government39;s spending plan.
Recent Budget and OBR39;s growth and inflation forecast have put a question mark on the BoE39;s need to be more aggressive, said Mohit Kumar, chief economist for Europe at Jefferies.
We expect Bailey to leave the door open for another cut in December, but tone down his recent dovish rhetoric.
Against the euro, sterling dipped…