Sterling Slides Amid Inflation Concerns: Impact on Global Markets

Sterling hit a two-month low due to weaker British inflation data, fueling expectations for Bank of England rate cuts. Concurrently, the euro fell and traders weighed U.S. Federal Reserve rate policies amid a potential Trump election influence. Australian and New Zealand currencies also weakened over China stimulus skepticism.

Sterling slumped to a two-month low as weaker than anticipated British inflation data sparked anticipation of aggressive rate cuts by the Bank of England. The pound slipped below $1.30 for the first time since August 20, igniting discussions among economists.

Analysts predict further declines as the Bank of England leans towards rate cuts, potentially in upcoming meetings. Meanwhile, the euro faced a similar slump, driven by expectations of a European Central Bank decision, with the currency falling to a 10-week low.

Beyond Europe, traders considered the impact of U.S. Federal Reserve policies, betting heavily on a smaller rate cut while weighing potential political shifts. Meanwhile, the Australian and New Zealand currencies suffered amid skepticism about China's fiscal commitment.

(With inputs from agencies.)