Sterling is expected to struggle to gain ground this week, while expectations of a November rate hike are growing on the back of improving employment and accelerating inflation. The outlook also points to concerns over fiscal management surrounding the Autumn Budget, which could put selling pressure on sterling.
Amid improving employment conditions and accelerating inflation in the UK, expectations are growing that the Bank of England will raise interest rates in November. As a result, sterling is expected to test higher levels.
However, concerns over a deterioration in economic sentiment remain, while uncertainty has emerged over fiscal management surrounding the Autumn Budget. This could prompt selling of sterling, and fiscal concerns may cap its upside.
Meanwhile, if the Bank of Japan’s monetary policy meeting proceeds in line with expectations, yen buying is likely to be limited, potentially supporting sterling. The projected range is 207 yen 00 sen to 213 yen 00 sen.