Pound rises as BoE rate cut looms; dollar surges on Trump win

The British pound edged to $1.293 on Thursday, recovering slightly after a 1.2% slide in the previous session, as investors looked toward the Bank of England’s highly anticipated policy meeting.

Pound rises as BoE rate cut looms; dollar surges on Trump win

The BoE is expected to lower its benchmark interest rate by 25 basis points to 4.75%, following a September pause and a quarter-point cut in August. However, the outlook for future cuts has moderated; expectations for a December reduction have waned. However, markets still forecast three rate cuts by the close of 2025 as the central bank navigates a cautious path amid persistent inflation.

Dollar jumps to 4-month high as Trump policies stir inflation bets

Meanwhile, the U.S. dollar surged to near four-month highs on the heels of Donald Trump’s election to a second term, sparking a revival of so-called “Trump trades.” His policy agenda, which includes potential tariff increases and corporate tax cuts, could drive up inflation, raising the likelihood that U.S. interest rates will remain elevated for a prolonged period. This shift has impacted global currency markets, creating volatility as traders weigh the potential implications of U.S. fiscal and trade policies on global economic stability.