Sterling Struggles as Bank of England Awaits Critical Rate Decision

The British pound slightly dipped against the dollar but remained steady against the euro. Traders anticipate Bank of England Governor Andrew Bailey's remarks, which may influence rate cut expectations. Recent weaker-than-expected inflation adds to uncertainties, with future British budget plans also holding significant investor interest.

The British pound experienced a minor dip against the dollar while holding its position against the euro as traders braced for possible shifts in monetary policy. The awaited comments from Bank of England Governor Andrew Bailey are expected to shed light on the central bank's future rate actions.

The decline in sterling comes amid a strengthening dollar, partly due to expectations of a slower pace of rate cuts from the Federal Reserve and the potential re-election of former President Donald Trump. His proposed policies, especially tariffs, could lead to increased U.S. yields and a stronger dollar.

Governor Bailey's upcoming address at the IMF is pivotal, as a dovish tone could further pressure the pound, especially with inflation figures lower than anticipated. Meanwhile, the British budget announcement at the end of October is eagerly watched, with fiscal strategies under scrutiny.

(With inputs from agencies.)