FX.co ★ Pound Holds Near One-Month High

The British pound was little changed above $1.33, holding near its strongest level in almost a month, as the US dollar pulled back from recent highs. The move followed comments from Federal Reserve Chair Kevin Warsh, who avoided giving clear signals about the outcome of this month’s FOMC meeting, leading markets to scale back expectations of a rate hike next week.

At the same time, traders have slightly increased their bets on Bank of England tightening, with four 25-basis-point rate hikes now priced in by July and the first potentially arriving as early as November. Investors are also positioning ahead of next week’s UK budget, with several major asset managers wagering that fiscal discipline will be supportive for gilts. Demand for UK government bonds could strengthen further if Chancellor John Healey reassures markets that public spending and borrowing will remain contained.

On the data front, London property asking prices rose 2.5% in October, according to Rightmove, marking a second consecutive monthly increase.