The Pound Sterling is trading calmly above 1.30, supported by some recent positive data. The final services and composite PMI readings came in slightly better than expected, landing in the low 50s. People are closely watching the UK’s financial situation ahead of the November budget. There are worries about the Office for Budget Responsibility’s productivity estimates. The Bank of England is expected to keep interest rates at 4.00%, following earlier cuts and a careful approach due to ongoing inflation concerns.

Inflation Concerns Persist

Even though the headline CPI is close to the 2% target, wage growth and inflation in services are still high. Governor Andrew Bailey mentioned that inflation isn’t completely under control, indicating they may keep rates steady. EUR/USD is trading below the 1.1500 level, struggling to find demand amid a strong US Dollar. GBP/USD remains under pressure, staying below 1.3050, as everyone looks forward to the BoE meeting, where the consensus is a rate hold. Gold prices are eyeing $4,000 per troy ounce, supported by US Treasury yields. Ethereum is making a comeback, rising to $3,350 after previous market dips. On the other hand, Stellar may see a 15% drop as interest wanes, following a Death Cross pattern on its chart. The upcoming week may challenge investor sentiment due to US data and central bank meetings. With Pound Sterling trading steadily above 1.30, there’s an opportunity in the current low volatility. The implied volatility for GBP/USD over the next month is around a three-month low of 7.2%. However, this may change with the UK budget announcement expected on November 26. It might be wise to think about buying straddles or strangles that expire in early December to prepare for likely price swings after the budget is released.

Fiscal Update Risks

The main risk for the Sterling is a negative fiscal update, especially with talk of bigger budget shortfalls. We recall the market turmoil after the mini-budget in 2022. With UK debt-to-GDP now over 105%, any sign of fiscal trouble could lead to a sudden sell-off. Buying GBP/USD put options with a strike price of 1.29 or 1.28 could be a way to hedge against a possible drop below the 1.30 support level. The Bank of England’s choice to maintain rates at 4.00% reflects this cautious stance. Recent data from October 2025 shows UK wage growth at 5.5%, preventing the central bank from hinting at possible future cuts, which removes a potential support factor for the pound. As a result, fiscal news is set to be the key driver for Sterling in the upcoming weeks. It’s important to note the US Dollar’s strength, which is holding back gains for other currencies. The October ISM Services PMI came in strong at 54.1, making it tough for EUR/USD to break through the 1.1500 resistance level. We could use this technical barrier to position ourselves bearish, such as by selling call spreads on the Euro. Gold’s resilience is impressive, as it aims for $4,000 per ounce, even as US Treasury yields rise. This suggests strong support from ongoing inflation fears and geopolitical uncertainty. We believe this trend is bolstered by continued demand from central banks, as data from the World Gold Council in Q3 2025 shows significant net purchases by emerging market institutions. In the crypto market, there’s an interesting divergence that could open up pairing opportunities. While Ethereum is finding stability above $3,350, Stellar (XLM) has just confirmed a “Death Cross,” where its 50-day moving average dipped below the 200-day average. We should consider taking long positions in ETH futures while also looking to short XLM or buy put options to benefit from its bearish momentum. Create your live VT Markets account and start trading now.

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