Daily digest market movers: Pound Sterling trades with caution on geopolitical tensions
- The Pound Sterling trades cautiously against its major peers on Tuesday, with investors focusing on Middle East tensions driving market sentiment. In Tuesday’s Asian session, Iran's Foreign Minister Abbas Araqchi issued a warning to Israel that the nation will face a strong retaliation if it attempts to attack their infrastructure.
- The British currency is also under pressure as traders adjust market expectations for the Bank of England (BoE) interest rate outlook. Market participants expect the BoE to cut interest rates again in November. BoE’s rate cut prospects increased sharply after last week’s comments from Governor Andrew Bailey indicated that the central bank could cut interest rates aggressively if price pressures decline further.
- The United Kingdom (UK) inflation has remained sticky due to stubborn price pressures in the services sector amid stronger wage growth. UK annual service inflation accelerated to 5.6% in August from 5.2% in July.
- This week, investors will pay close attention to the monthly Gross Domestic Product (GDP) and the factory data for August, which will be published on Friday. The data will provide fresh cues about the current economic health.
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