Sterling dips on Tuesday ahead of BoE decision

Sterling edged lower against the US dollar on Tuesday as investors caution grew over Middle East conflict and anticipation built ahead of Wednesday’s UK inflation figures and a Bank of England interest rate decision due on Thursday. The pound slipped to $1.3527 and also weakened against the euro, trading at 85.27 pence.

Markets are closely watching May’s inflation data, expected to show a slight easing to 3.4 per cent, alongside signs that the BoE may hold interest rates steady at 4.25 per cent, with two more cuts forecast by year-end.

Meanwhile, US President Donald Trump on Monday signed an agreement easing tariffs on some British imports, reaffirming quotas and reducing duties on the UK aerospace sector. However, tariffs on steel and aluminium remain unresolved.

Despite striking the only US trade deal so far, sterling has slipped around 1 per cent against the euro since early June and remains down 3 per cent on the year against the common currency.

Attribution: Reuters
Subediting: M. S. Salama