Sterling edges higher as traders await steer from Bank of England

The pound ticked higher against the dollar and euro on Tuesday as traders await comments by Bank of England Chief Economist Huw Pill later this week for more direction on the central bank’s next move.

Sterling was up 0.10% at $1.2614 at 1000 GMT. It was 0.13% higher against the euro at 85.75 pence, recovering having softened to its weakest in two weeks against the single currency the day before.

“The pound seems to be moving in line with other pro-cyclical currencies today. There are not many data inputs from the UK this week,” said Francesco Pesole, FX strategist at ING, instead pointing to non-UK data due later this week.

Shares and other currencies, such as the Australian dollar, that rise when traders are positive about the global economy were also trading higher on Tuesday.

Pesole said he expects the pound to perform better against the dollar than the euro this week, forecasting eurozone inflation data due this week to be higher than expected.

Traders are currently betting on a more than 90% chance of a 25 basis point hike from the Bank of England at its next meeting on Sept. 21.

The BoE raised interest rates for the 14th time since late 2021 on Aug. 3 as it continued to try to calm inflation.