Sterling holds near 10-week high

The British pound held above $1.363, close to its highest in over ten weeks, as traders awaited key central bank decisions.

The Bank of England is expected to leave rates at 4% on Thursday while slowing its £100 billion annual bond unwind.

The latest data showed that UK inflation remained at 3.8% in August, as expected and matching the 18-month high recorded in July.

Additionally, job data showed steady unemployment at 4.7%, wage growth of 4.8% excluding bonuses (4.7% including bonuses), and a slight payroll decline of 8,000, all broadly in line with forecasts. BoE rate-cut bets were little changed, with markets pricing only a one-in-three chance of a move by December.

Meanwhile, the US Federal Reserve is widely expected to cut rates by 25 bps today, with traders anticipating at least two more reductions by the end of 2025.