The key factor for the pound is considered to be whether there will be another rate hike in November, and the pound's movements remain in focus in the New York market. It is currently trading at around 1.3387 against the dollar, while GBP/JPY has moved from the upper-¥209 range to the ¥211 range.
GBP/USD fell to the mid-1.33 range today before recovering to the upper-1.33 range. GBP/JPY rose to the ¥211 range in response to yen weakness following the Bank of Japan's policy meeting, but stalled in the ¥209 range as yen buying intensified following reports that the BOJ had conducted a rate check during New York trading hours.
The market is focused on whether the Bank of England will deliver another rate hike in November as it considers the outlook for monetary policy. Although the previous day's MPC meeting indicated that rates would remain on hold, some believe the pound could fall if the Bank also refrains from raising rates in November.
Growth in services prices was flat in August, while private-sector wage growth also slowed. The ILO unemployment rate was 4.9%, reinforcing the view that there is little reason to rush into another rate hike. The UK 10-year gilt yield has risen to around 5.2%, and some say the market is already carrying out much of the monetary tightening. In addition, the October budget proposals could dampen demand, making another rate hike a high hurdle.