Sterling Steadies Amid Fed Rate Cut Speculation

Sterling steadied after dipping to its lowest in two weeks against the dollar, while traders adjusted their expectations regarding a potential U.S. Federal Reserve rate cut. Analysts remain cautious ahead of the upcoming UK autumn budget, signaling potential headwinds due to possible tax hikes and their impact on consumer confidence.

Sterling maintained its footing after a two-week low versus the dollar, as traders adjusted expectations for a U.S. Federal Reserve rate cut next month.

The currency traded flat at $1.3416 against the dollar, while slightly rising to 86.46 pence against the euro, predicting a weekly decline of 0.9% after previous upward trends. Positive economic data and survey results offered a buffer throughout the week.

As the UK prepares for its autumn budget, experts like Jane Foley from Rabobank caution on potential tax hikes to support governmental spending commitments, which might impact consumer confidence and present challenges to growth.

(With inputs from agencies.)