Oil-Fueled Dollar Demand Pushes Sterling Lower
The pound slipped against major currencies on Tuesday as oil prices pushed towards $107 a barrel, boosting demand for the dollar.
According to Investing.com, the sterling was down 0.19% at $1.3232, while the euro fell 0.24% to $1.1344 as of 04:48 ET (08:48 GMT).
Optimism about progress in US-Iran negotiations has faded, with Iranian officials reportedly saying a deal is unlikely before the Nov. 3 US midterms.
Francesco Pesole, FX strategist at ING, said that 'we need to see some stability in bonds for the dollar to correct lower. That relies heavily on oil, and the latest news isn’t encouraging.' He added that high valuations with rates rising so rapidly create a tail risk associated with big dollar gains.
The pound's decline appears driven by dollar strength rather than UK fundamentals, with domestic data showing inflation easing to 1.4% in September from 1.5% in August.