Pound sterling fluctuates ahead of Treasury Committee hearings.

Pound trades sideways against its major peers on Tuesday as investors focus on the Monetary Policy Hearings, where a number of Bank of England (BoE) policymakers, including Governor Andrew Bailey, will answer questions from the Treasury Committee about the most recent interest rate decisions.

The interest-rate outlook, a major factor influencing the value of the pound sterling, may be reveale during the hearings, which begin at around 10:00 GMT. In addition to Bailey, the Deputy Governor The hearings will also feature participation from Clare Lombardelli and external members Alan Taylor and Catherine Mann of the Monetary Policy Committee (MPC).

In addition to the hearings, investors are anticipating the release of the October Consumer Price Index (CPI) data on Wednesday. Market expectations for the BoE’s interest rate decision at the December meeting will be greatly impacted by the inflation data.

Traders believe there is an 80% chance that the BoE will lower interest rates by 25 basis points (bps) to 4.50%.

According to Reuters, traders believe there is an 80% chance that the BoE will lower interest rates by 25 basis points (bps) to 4.50%. The BoE would be cutting interest rates for the third time this year and for the second consecutive time after staying unchanged in September, the headline CPI predicted to increase by 0.5%. It is estimated that headline inflation occurs annually to have increased from the previous release’s 1.7% to 2.2%. Economists predict a steady 3.2% growth in the core CPI, which does not include the volatile prices of food and energy. When determining interest rates, BoE officials closely monitor service inflation data, which investors will also be watching.

Daily Market update: The pound sterling continues to rise against the US dollar.

In London trading hours on Tuesday, the pound sterling maintains its gain against the US dollar (USD) from Monday, hovering around 1.2680. The US dollar’s rally seems to have stalled after posting a new year-to-date high, but the GBP/USD pair recovered after hitting a new six-month low close to 1.2600. The US Dollar Index (DXY), which compares the value of the US dollar to six other major currencies, adjusts from 107.00.

US dollar’s short-term outlook is stable as market players anticipate that President-elect Donald Trump’s economic agenda will increase inflationary pressures and spur economic expansion, which will result in fewer interest rate cuts from the Fed.

Traders anticipate that the BoE will lower interest rates by 25 basis points according to Nomura.

Traders have reduced their bets on an interest rate cut at the December meeting as a result of Trump’s win in both the Senate and the House of Representatives, as well as better-than-expected monthly Retail Sales data for October. The likelihood that the Fed will lower interest rates by 25 basis points, to 4.25%-4.50%, has dropped from 77% a month ago to 58.4%.

The Fed expected to pause the policy-easing cycle in December, according to global brokerage firm Nomura. “At this time, we anticipate that tariffs will cause actual inflation.” greater by summer, and the odds tilted in favor of a longer and earlier pause,” Nomura analysts stated. At the Fed’s March and June meetings next year, Nomura anticipates a 25 basis point interest rate cut.