Sterling gains on interest rate sentiment

Story link: Sterling gains on interest rate sentiment

Sterling was higher on Tuesday as sentiment expects the Bank of England to keep interest rates in the UK on hold when it meets on November 8 and the US Federal Reserve to cut rates when it announces its new decision on Wednesday.

Recent data showed that the UK economy expanded at a faster rate than had been expected in the third quarter.

Helping sterling in its gains on the session, a consumer confidence report out the US showed that sentiment declined more than had been expected in October, something that analysts believe that the Fed cannot discount when it makes its new rate decision.

At nearly 1 p.m. in New York, sterling was trading at $2.0665 to the US dollar, while it was at ¥237.0482 in relation to the yen and at €1.4332 versus the euro and at SFr2.4002 against the Swiss franc.

The Swiss franc saw gains after the president of the Swiss National Bank said the will take “necessary measures” if Swiss inflation rises due to the recently weakened franc, which has fallen 4 percent in relation to the euro since the beginning of the year.

Two percent of that decline has come since the SNB hiked interest rates there by a quarter point to 2.75 percent in September.

The Swiss franc stood at SFr1.6747 to the euro in early afternoon trade in New York, while it traded at SFr1.1615 in relation to the US dollar. The yen traded at ¥98.7602 to the Swiss currency.