US economy creates 531,000 jobs in October as hiring rebounds – business live | Business


Sterling fell across the board yesterday as the Bank of England defied market expectations and held firm on rates. The press conference that followed the decision was a lesson in confirming that the recent rate hike was too big, too soon, and although rates will go up, we now believe the first opportunity for them to do so would be February. Three decision-makers must change their minds for the decision to hike to be a majority; we don’t see that happening this year.

The delay allows many things, but mainly data on the development of the labor market after the holiday and other information on the development of energy prices during the winter.

For the pound sterling, the decision was akin to a trap door through which the pound tumbled. We have been pointing out for many weeks now that these rate expectations were really the only thing holding the pound in place and with their demise or severely weakened, the pound is looking for what can support it.

In a winter of Covid-19, Brexit supply and legal issues, higher energy costs and uncertain employment prospects, there is not much to shoot for on the pound sterling. It will likely still outperform the euro in the coming weeks, but those looking for solid material gains against the US dollar may need to reassess their thinking

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