Forex News: Pound Falls Amid BoE Rate Cut Speculation

Pound Falls Amid BoE Rate Cut Speculation

(RTTNews) - The British pound weakened against other major currencies in the European session on Tuesday, as traders speculate that the Bank of England (BoE) is likely to deliver a 25-basis-point rate cut in November.

Traders expect the possibility of additional easing by the Bank of England due to worries over the UK's fiscal outlook ahead of the November Autumn Budget.

After September's stable UK inflation and further indications of a cooling labor market, markets are now pricing in a larger chance of a 25-basis point rate decrease in November.

European stocks fell from record highs as investors looked forward to key central bank meetings as well as a planned meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping in South Korea on Thursday for direction.

There was also some disappointment on the data front, with a measure of German consumer confidence hitting its lowest level since April amid continued geopolitical uncertainty and higher inflation.

In the European trading today, the pound fell to a 3-year low of 1.0558 against the Swiss franc, a 3-month low of 0.8765 against the euro and a 6-day low of 202.05 against the yen, from early highs of 1.0609, 0.8726 and 203.72, respectively. If the pond extends its downtrend, it is likely to find support around 1.04 against the franc, 0.88 against the euro and 199.00 against the yen.

Against the U.S. dollar, the pound slipped to a 4-day low of 1.3301 against U.S. dollar from an early 6-day high of 1.3370. The pound may test support near the 1.32 region.

Looking ahead, U.S. Redbook report, U.S. S&P/Case-Shiller home price index for August, U.S. Richmond Fed manufacturing index for October and U.S. Dallas Fed services index for October is slated for release in the New York session.

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