The pound sterling weakened against the US dollar during Asian trading on Tuesday (November 3, 2026), with the GBP/USD pair falling toward the 1.3405 level. This decline halts a four-day winning streak for the pound. Investors are turning cautious ahead of several key events—including the US midterm elections, the Bank of England’s (BoE) interest rate decision, and the release of US labor market data—all of which have the potential to influence currency market movements.
The US midterm elections are a primary focus, as the outcome could shape the direction of Washington’s economic and fiscal policies. Markets are closely watching for potential shifts in control within Congress, as well as the implications for tax policy, government spending, and regulations surrounding artificial intelligence (AI). A Democratic sweep of both chambers of Congress could lead to tighter oversight of the AI industry, while a Republican victory might pave the way for tax reforms and increased defense spending—moves that could potentially widen the US budget deficit.
In the UK, investor attention is fixed on the Bank of England meeting scheduled for Thursday. Economists anticipate that the BoE will raise interest rates by 25 basis points, bringing the rate to 4.00% from 3.75%. If implemented, this would mark the first rate hike since August 2023, a move aimed at curbing UK inflation, which currently remains above the central bank’s 2% target.
Beyond the interest rate decision, the market will be scrutinizing comments from BoE Governor Andrew Bailey regarding the future outlook for monetary policy. Should Bailey signal that further rate hikes are necessary to rein in inflation, the pound could find support. Conversely, if the BoE adopts a more cautious stance regarding economic growth, the potential for the British currency to strengthen may be limited. A series of U.S. labor market data will also be a key factor in determining the strength of the dollar.
Newsmaker notes that the weakening of the pound reflects growing investor caution ahead of significant economic and political decisions in both the U.S. and the U.K. An interest rate hike by the Bank of England (BoE), accompanied by a firm statement, could potentially support a recovery in the GBP/USD pair. Conversely, if U.S. economic data continue to show strength—thereby increasing the likelihood of further policy tightening by the Federal Reserve—the dollar could strengthen once again, placing continued pressure on the pound sterling.