Sterling Sinks Amid Hawkish Fed Comments and Expectations of Rate Hike

The Pound Sterling has fallen for a fourth consecutive session due to hawkish comments from Federal Reserve officials. The GBP/USD is trading just above 1.3200, its lowest level in nearly three months.

New York Fed President Williams said another interest rate increase before the end of the year is 'a reasonable expectation', while Philadelphia Fed President Paulson argued that some modest further tightening may be warranted. US jobless claims came in at 197K against a forecasted 201K, which hasn't given officials reason to back off.

The Federal Reserve's decision on October 28 and the Bank of England's on November 5 have weighed on the Pound Sterling. A hike by the BoE would come eight days after a US increase that markets already consider likely.

Deputy Governors Lombardelli and Breeden spoke out in favor of a rate hike, citing the risk of wage bargaining and price-setting adjustments due to high energy prices. However, external member Dhingra sounded less urgent, stating that Britain isn't seeing broad price rises like those seen in 2022.