### Pound Falls to Three-Month Lows Against Dollar on UK Inflation Data

#### Overview
– The pound near three-month lows against a stronger dollar
– Data shows inflation easing in the UK
– Sterling dipped 0.1% to $1.2795, hitting lowest since early August
– Regular pay for British workers grew at slowest pace in two years
– Bank of England confident inflation pressures will continue to ease

#### Market Analysis
– BoE lowered interest rates for second time since 2020
– Labour government’s budget expected to lead to higher inflation and economic growth
– UK inflation forcing BoE to cut rates slower than euro zone or U.S. central banks
– Sterling outperforming major currencies against the dollar this year
– Possibility of market pricing in more interest rate cuts by BoE could make sterling vulnerable
– Traders pricing in only a 15% chance of another 25-bp rate cut in December

#### Expert Opinion
– ING FX strategist Francesco Pesole: Risks remain skewed towards a dovish repricing and negative impact on sterling
– Markets will carefully assess inflationary implications of the budget

#### Pound and Euro Exchange Rate
– Pound flat at 83.31 pence per euro

#### Global Market Impact
– Dollar has scaled more-than six-month peak against major currencies
– Driven by bets on incoming U.S. President Donald Trump’s policies on tax and tariffs stoking inflation
– Federal Reserve may slow pace of interest rate cuts or pause them

### Analysis
The article highlights the impact of UK inflation data on the pound’s performance against the dollar and euro. The Bank of England’s rate cuts and the Labour government’s budget are key factors influencing market sentiment. Traders are cautious about potential interest rate cuts by the BoE, which could affect sterling. The global market dynamics, driven by U.S. policies, also play a significant role in currency movements. Overall, the article provides valuable insights into the current financial landscape and its implications for investors and the general public.

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