Sterling Plunges to Near 3-Month Low as Rate Hike Fears Mount

Sterling dropped to its lowest level in nearly three months against the dollar on Thursday, amidst concerns over rate hike expectations.

The British currency fell 0.10% to $1.3222, its lowest point since July 1, as investors reacted to the Federal Reserve's hawkish shift last week.

Daragh Maher, senior forex strategist at HSBC, noted that 'the market is already priced for hikes from a Bank of England that still sounds somewhat unconvinced.'

Markets are pricing in around 100 basis points of BoE rate hikes over the next 12 months, implying four quarter-point increases from the current 3.75% rate.