Sterling climbed back above the $1.34 level, attempting to recoup last week’s losses as easing oil prices tempered market concerns and investors looked ahead to key economic data due later this week. Brent crude slipped below $97 a barrel after US President Donald Trump said it was “highly unlikely” he would authorize further strikes on Iran, provided negotiations over its nuclear programme and the reopening of the Strait of Hormuz made substantial progress.
In the UK, focus is on Thursday’s third-quarter GDP release, which is expected to show a robust 0.7% expansion, driven by strong services sector output. Elevated UK government bond yields and expectations of additional Bank of England interest rate hikes are also supporting demand for the pound.
In the US, attention turns to Tuesday’s CPI report, which could offer further insight into the Federal Reserve’s policy outlook and the likely timing of any future rate increases.
