GBP Defies US Yields Surge Amid Oil Price Hike and BoE Tightening Bets
The British Pound has defied the surge in US Treasury yields and a firmer Dollar by edging higher, as investors grow more confident that the Bank of England will tighten monetary policy further.
The GBP/USD pair rose to 1.3275 earlier this week, but has since pulled back to 1.3252, despite the US 10-year Treasury note rising over 10 basis points to 5.261%.
Oil prices have also increased, with West Texas Intermediate (WTI) crude up more than 3% at $95.41 per barrel, as US President Donald Trump warned that attacks could resume after the US midterm elections.
The surge in oil prices has revived expectations of a Bank of England rate hike, with Deputy Governor Dave Ramsden commenting that upside inflation pressures could be grounds for raising rates.
Meanwhile, traders are eyeing the release of the UK Autumn Budget on October 28, which is expected to provide more insight into the government's economic policies.