Sterling rose about 0.40% to roughly $1.3430-$1.3432 on Friday and gained 0.20% against the euro to 1.1990 as the dollar weakened ahead of U.S. midterm elections and renewed volatility in artificial-intelligence stocks. UBS expects the pound to reach $1.38 by December, $1.39 by March 2027 and $1.41 in the second half of 2027, citing heavily short sterling positioning, UK data that continues to exceed forecasts and a short Bank of England rate-hiking cycle beginning next week, with a second increase expected in the first quarter of 2027. The dollar-led move came without a major UK data catalyst, while lower U.S. rate expectations could further support sterling; stronger U.S. growth or additional Federal Reserve increases are the main risks. GBP/USD rose 1.22% in October, its strongest monthly performance since July, while GBP/EUR gained 2.40%, its largest monthly advance in the 2026 data. The euro weakened against sterling to 0.8339 pounds, its lowest level this year, as concerns over France's budget and public finances outweighed support from stronger-than-expected euro-zone growth and hawkish European Central Bank signals.