The pound moved in tight ranges on Tuesday (25 October), with investors adopting a cautious approach amid a lack of economic data ahead of Mark Carney's testimony at the House of Lords.

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Sterling was broadly unchanged from the day before against the euro, exchanging hands at €1.1233, but slid 0.17% against the dollar to $1.2214.

The pound's new-found stability, however, could be short-lived, as the Bank of England Governor faces questions on the implications of the Brexit vote from the House of Lords Economic Affairs Committee later this afternoon.

"The Bank's next policy meeting is little more than a week away and markets will be looking for any hints that the economy's recent resilience, higher inflation and renewed sterling weakness will see policymakers backtrack from earlier guidance for a further interest rate cut before the year is out," said Chris Saint, senior analyst at Hargreaves Lansdown Currency Service.

Elsewhere, the dollar's rally showed no sign of stopping, as the greenback gained against all its major rivals. The US currency was up 0.11% against the euro, trading at 0.9209 euro cents, and rose 0.57% and 0.45% against the yen and the Canadian dollar respectively, exchanging hands at ¥104.77 and CAD$1.3346.

"The rise in the US dollar [...] doesn't appear to be causing as much angst as it was a month ago simply because recent earnings out of the US have been coming in ahead of expectations, particularly in the banking sector, where the prospect of a US rate rise in December is being treated as a good thing, where rates everywhere else are at record lows," said Michael Hewson, chief market analyst at CMC Markets.

"The market is now assigning a 70% probability of a move in December, with next week's Federal Reserve meeting not on the table."

Naeem Aslam, chief market analyst at Think Markets UK, added the greenback could extend its rally for the foreseeable future, with the yen and the pound poised to bear the brunt of the US currency's strength.

"We think that the dollar a little more room to run towards the upside," he added.

"This move in the dollar may become more prominent against the yen and against the sterling."