Sterling Slumps as ‘Trump Bump’ Boosts Dollar across Global Markets

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Key Takeaways

  • 💸 The pound weakened against the dollar as investors watch for Trump’s Treasury Secretary pick
  • 📉 Sterling has fallen by close to 2% against the dollar this month
  • 🇬🇧 UK inflation pickup may impact Bank of England rate decisions
  • 📅 Preliminary business activity surveys for UK, euro zone, and US due on Friday
  • 📈 UK PMI for October above 50, indicating growth
  • 💱 The pound weakened against the dollar, influenced by the anticipation of President-elect Trump’s Treasury Secretary pick.
  • 📊 Traders expect the Bank of England could lower rates by around 68 basis points by next December.
  • 📈 UK consumer inflation data indicated a potential rate cut but no expectation for any move at the Bank’s next meeting in December.
  • 📅 Upcoming business activity surveys for November in the UK, euro zone, US, and elsewhere are anticipated to be released on Friday.
  • 💷 Sterling fell with a 0.1% drop to $1.26405, while the dollar rose.
  • 🏦 Markets predict a possible 68 basis point rate cut by the Bank of England by December next year.
  • 💬 Strategist Michael Pfister anticipates a potential interest rate reduction in February if inflation rates continue to rise.
  • 📊 The Purchasing Managers’ Index (PMI) for the UK in October was 52, indicating growth, and is expected to be around 51.8 in the upcoming release.

Brexit and Economic Uncertainty Impacting UK Markets

As the pound weakened against the dollar, investors are closely monitoring the selection of President-elect Trump’s Treasury Secretary, leading to a decrease in Sterling of almost 2% this month. The uncertainty surrounding Brexit and its economic implications have contributed to this downward trend. With UK inflation on the rise, there are concerns about how this may affect the Bank of England’s future rate decisions. Money markets are already predicting a potential rate cut of 68 basis points by the Bank of England by December next year.

In addition, upcoming business activity surveys for November are eagerly awaited, with expectations for UK PMI indicating growth. Strategists like Michael Pfister are speculating on the possibility of an interest rate reduction in the future if inflation rates continue to rise. Overall, the economic landscape in the UK remains uncertain as various factors come into play, influencing market behavior and investor sentiment.

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