Sterling strengthens on rate speculation

Sterling saw gains Tuesday as most analysts expected that the Bank of England will keep interest rates in the UK on hold when it meets on November 8 as recent data showed that the UK economy expanded at a faster rate than had been expected in the third quarter.

At nearly 1 p.m. in New York, sterling was trading at $2.0665 to the US dollar, while it was at ¥237.0482 in relation to the yen and at €1.4332 versus the euro and at SFr2.4002 against the Swiss franc.

The UK currency was also helped by a consumer confidence report that showed US consumer sentiment declined more than had been expected in October, something that analysts think the Federal Reserve cannot afford to ignore when it makes its new rate decision on Wednesday.

The Swiss franc was also higher after the president of the Swiss National Bank said he will do what is necessary if Swiss inflation rises due to the recently weakened franc.

The Swiss currency was weakened by 4 percent in relation to the euro since the beginning of the year, with two percent of that decline has come since the SNB hiked interest rates by a quarter point to 2.75 percent in September.

The Swiss franc stood at SFr1.6747 to the euro in early afternoon trade in New York, while it traded at SFr1.1615 in relation to the US dollar. The yen traded at ¥98.7602 to the Swiss currency.

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