Positive macro-economic data released by the British authorities led to increased hope that the Bank of England would opt for an interest rate hike on its next policy meeting in November. The British pound, accordingly, maintained its high position and even continued to rise against the United States dollar.
The Sterling traded at $1.3216 by 1555 GMT – indicating a rise of 0.6%. The currency managed to climb by 1.5% from its nadir on Friday last week. It also stood firm against the single currency trading at 89.34 a pence.
Nevertheless, some analysts warn that the pound’s recovery could be a counter-trend to the massive fall at the end of last week, so the current rise might fail to sustain itself in the long run.
Some investors believe that the rising prices of oil may be an indication that oil markets are now progressively tightening after years of output glut. The United States West Texas Intermediate traded at $51.07 a barrel, higher by 0.3% or 15 cents than its last close. The international benchmark, Brent crude futures, traded at $56.71 per barrel after climbing by 0.2% or 10 cents.It should be borne in mind that oil prices rose by 2% on Tuesday. It seems that the market is tightening. However, analysts and traders are a bit uncertain about the stance of oil in 2018. Traders will closely monitor U.S. fuel inventory data on Wednesday and Thursday for indicators on price direction.