Sterling Rises Amid Rate Hike Expectations And Mixed US Data
Sterling rose against the dollar on Tuesday, with GBP/USD up 0.28% to about 1.3244 as markets priced in a Bank of England rate rise in November and positioned for US CPI. Improved risk sentiment weighed on the greenback despite mixed US releases: the ADP Employment Change four-week average eased to 24.75K from 25.25K, while Existing Home Sales climbed to 3.99 million from 3.93 million, beating a 3.96 million forecast and rising 1.5% month on month in September. Federal Reserve commentary kept policy risks in view, with officials pointing to steady labour conditions and persistent inflation, alongside discussion of AI’s effect on yields and anchored inflation expectations.
IMF Forecasts And Sterling Support Factors
The IMF lifted its 2026 UK growth forecast to 1.3% from 0.5%, while warning of a potential stagflation scenario in which inflation and unemployment could rise. Sterling also drew support from British Retail Consortium retail sales data and hawkish remarks from BoE policymaker Megan Greene on second-round inflation effects. Attention turns to US CPI, UK GDP due Thursday, and the Autumn Budget on 28 October. On charts, GBP/USD remained below clustered SMAs near 1.3430, with resistance around 1.3289; RSI sat at 42.35.
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