Pound sterling trades sideways against the US dollar.

During Tuesday’s London session, the Pound Sterling (GBP) trades in a relatively tight range around 1.2950 against the US Dollar (USD). The GBPUSD pair is consolidating ahead of the United States (US) presidential election, which will begin during the North American session. The US Dollar Index (DXY), which measures the value of the US dollar against six major currencies, likewise holding steady near 103.80 following a severe sell-off on Monday.

The greenback went through a large unwinding of long positions after the Des Moines Register/Mediacom Poll revealed that current Vice President Kamala Harris leads former President Donald Trump by three points in Iowa, a state Trump easily won in 2016 and 2020. The US Dollar surged in October as markets priced in Trump’s election, with his predilection for protectionist measures expected to enhance the Greenback’s worth

If Trump wins the presidency, he  promised to impose a universal 10% tariff on all economies, with the exception of China, which expected to face far higher levies. In addition, he vowed to decrease corporation taxes, which would certainly lead to substantial inflation.

The US presidential election the primary went through a large unwinding of long positions after the Des Moines Register/Mediacom Poll revealed that current Vice President Kamala Harris leads former President Donald Trump by three points in Iowa, a state Trump easily won in 2016 and 2020. The US Dollar surged in October as markets priced in Trump’s election, with his predilection for protectionist measures expected to enhance the Greenback’s worth.

If Trump wins the presidency, he has promised to impose a universal 10% tariff on all economies, with the exception of China, which is expected to face far higher levies. In addition, he vow to decrease corporation taxes, which would certainly lead to substantial inflation.

Daily Market movers: Pound remain silent ahead of BoE.

The US presidential election is the primary points (bps) to 4.75 percent. This would mark the second interest rate drop of the year. Seven members of the Monetary Policy Committee (MPC)  expected to vote for additional policy easing, while the remaining two will most likely vote to maintain interest rates unchanged.

Catherine Mann, a BoE external member, projected to be one of two members who will vote to maintain interest rates unchanged. In a panel discussion on the sidelines of International Monetary Fund (IMF) meetings on October 24, Mann, an outspoken hawk, praised the release of modest inflation figures while emphasizing the need for further slowing. “In order to get to a target consistent with a 2% inflation rate, services (inflation) still have a long way to go,” Mann said.

When asked about Her current interest rate position, Mann stated that rate decreases are premature at this point.

Market players continue to examine the impact of the UK budget pronouncements on the country’s inflation outlook.

Apart from the interest rate decision, investors will be looking for any comments from the BoE on the impact of the UK Autumn Forecast Statement, which was released by UK Chancellor of the Exchequer Rachel Reeves last week, on monetary policy and the inflation forecast. Following the budget announcement, the Office for Business Responsibility (OBR) stated that the announced fiscal policies both pro-growth and inflationary.