The British pound was little changed, trading just above $1.34 and hovering near its strongest level since September 15, as investors positioned for the Bank of England’s expected return to monetary tightening later this week. At the same time, uncertainty ahead of Tuesday’s US midterm elections weighed on the US dollar.
The Bank of England is widely expected to deliver its first interest rate hike since 2023 on Thursday, responding to mounting inflationary pressures linked to the Iran war and signs of resilience in the UK economy. However, policymakers are also expected to temper market expectations for multiple additional rate increases next year.
In the United States, voters are heading to the polls to deliver their verdict on the first two years of President Donald Trump’s second term. Polls and nonpartisan analysts indicate that Democrats are favored to regain control of the House of Representatives, while the outcome in the Senate remains uncertain.
