Key events today:

15.10 12:30 UTC: USD – Empire Manufacturing Index

The pound is stabilizing and attempting to recover part of its losses amid a weaker US dollar as markets anticipate a Fed rate cut at the end of October. Comments from Fed officials emphasizing the priority of supporting employment and assessing the economy’s trajectory in light of limited data have reduced demand for the dollar as a safe-haven asset. This creates room for a rebound in higher-yielding currencies, including the pound.

The domestic backdrop in the UK remains mixed: inflation in 2025 stays above the Bank of England’s target, limiting the pace of monetary easing, though the regulator stresses caution and consistency. This configuration lowers the likelihood of a rapid rate cut, supporting the yield differential in favor of the pound versus the dollar, particularly as the greenback weakens.

Global market sentiment is gradually improving thanks to expectations of dovish moves by major central banks and easing volatility in bond yields. Against this backdrop, demand for the pound benefits, and current levels look attractive for tactical recovery against the dollar, provided risk control and attention to upcoming Bank of England communications and inflation reports.

Recommendations: BUY 1.3350, SL 1.3300, TP 1.3450