On Friday, the pound sterling rose 0.41% to 1.3432 dollars, and the euro added 0.20% to 1.1203. The dollar weakened due to position reductions ahead of the US midterm elections.
On Friday, the pound sterling was trading higher, while the euro rose slightly. The dollar weakened amid position reductions ahead of the US midterm elections and a new wave of concerns around AI company stocks.
The pound rose 0.41% to 1.3432 dollars, the euro added 0.20% to 1.1203. Against the euro, the pound strengthened 0.20% to 1.1990 as of 14:07 Moscow time.
ING analyst Francesco Pesole noted that the dollar remains at risk of decline due to fluctuations in sentiment around AI stocks. Pressure on the technology sector prompted purchases of Treasury bonds. Ahead of Tuesday's elections, there was preemptive closing of net long positions. The probability of Democrats winning on prediction markets is estimated at almost 68%. Pesole advised caution regarding bets on dollar growth in the coming days.
Yesterday's US data turned out hawkish. GDP growth in the third quarter was 3.4%, exceeding consensus. The core PCE index in September rose 0.3% month-on-month. Markets are pricing in a rate hike in December. Speeches by several Fed representatives are expected today.
The pound's movement is mainly tied to the dollar's dynamics, as no significant statistics were published in the UK. UBS expects the Bank of England to start a short cycle of rate hikes next week, with the second hike occurring in the first quarter of 2027. A significant share of short positions on the pound leaves room for further currency growth.
The pound-dollar pair rose 1.22% in October, showing the best monthly result since July. The euro-dollar pair added 2.40% for the month. The eurozone also showed GDP growth in the third quarter of 0.4% quarter-on-quarter and 1.3% year-on-year, exceeding forecasts. The ECB kept rates unchanged, and Christine Lagarde's press conference had a hawkish tone.