British Pound Rises as BoE Official Warns of Embedded Inflation
The British Pound Sterling rose by 0.40% on Tuesday, benefiting from a retreat in the US Dollar and hawkish remarks from a Bank of England (BoE) official. Catherine Mann, a member of the BoE’s Monetary Policy Committee (MPC), warned that inflation has become "embedded," which boosted expectations for a November rate hike. The GBP/USD pair was trading at 1.3281 at the time of writing.
The US Dollar weakened as risk appetite improved, with the US Dollar Index (DXY) falling 0.31% to 101.78. The US trade deficit widened in August to $-105.6 billion, exceeding forecasts, while the ADP Employment Change 4-week average showed a solid labor market.
In the Middle East, tensions persisted as Yemen forces clashed with the Houthis, impacting energy prices. West Texas Intermediate (WTI) crude oil dropped 0.59% to $88.75 per barrel. Traders are now awaiting BoE Governor Andrew Bailey’s speech on Thursday, which could further influence market expectations.
Technically, GBP/USD remains bearish in the near term, trading below key moving averages and resistance levels. Immediate resistance is at 1.3304, with support at 1.3159 and 1.3140.