Pound and U.S. dollar banknotes are seen in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights
Nov 7 (Reuters) – Sterling dropped against a strengthening U.S. dollar on Tuesday, with investors closely watching economic data and market bets on the Bank of England’s future moves.
Higher yields and a strong economy usually increase demand for the nation’s currency.
The pound rose more than 2% versus the greenback last week, its biggest gain in almost four months, after the BoE held interest rates at a 15-year high and stressed the need to continue fighting inflation, while U.S. yields and the greenback tumbled after the Fed suggested its tightening path was over.
Money markets priced in more than a 50% chance of rates being unchanged until June 2024 and a higher chance of a 25 basis points rate cut in August next year.
The Bank of…
