- Sterling of the pound is facing pressure on key peers ahead of BOE's monetary policy on Thursday.
- BOE is widely expected to cut interest rates to 25 bps to 4.5%.
- Investors are awaiting US NFP data. This will affect the Fed's expectations for its monetary policy outlook.
Pound Sterling (GBP) slumps near 1.2440 against the US Dollar (USD) in Thursday's European session. The edge of the GBP/USD pair decreases as it acquires ground prior to US (US) non-agricultural payroll (NFP) data in January. This will be released on Friday.
The US Dollar Index (DXY), which tracks the value of greenbacks against six major currencies, finds temporary support near 107.30 after a three-day sale from a two-week high of nearly 110.00.
Official US (US) employment data is expected to drive market speculations about how long the Federal Reserve will hold interest rates at current levels. Last week, Fed Chairman Jerome Powell said that after central banks have not changed in the 4.25%-4.50% range, they only saw “true advances in inflation or at least the weaknesses of the labour market.” He said he would do it. .
According to the CME FedWatch tool, the Fed plans to announce its next interest rate cut at its policy meeting in June.
The US dollar witnessed a sharp sale on the first three trading days of the week as the horrors of the World Trade War recedes. Investors say that US President Trump has imposed a 10% tariff and a 10% tariff on coal and liquefied natural gas (LNG), crude oil, agricultural machinery and some taxes, leading to the issue being between the US and China. I hope there will be a trade war. Auto. Meanwhile, President Trump has suspended 25% tariff orders in Canada and Mexico for 30 days.
Daily Digest Market Mover: Pound Sterling decreases with caution ahead of Bo's policy decisions
- Poundsterling weakened against key peers on Thursday ahead of the Bank of England (BOE) monetary policy decision, and will be announced at 12:00 GMT. The BOE is almost certain to cut interest rates to 25 basis points (BPS) to 4.5%, with 8-1 votes split. Katherine Mann, a straightforward hawk member of the Monetary Policy Committee (MPC), is expected to help not change interest rates to 4.75%.
- BOE will announce its decision to cut interest rates to revive labor demand amidst stagnant economic growth. This is the third interest rate reduction by the BOE, a cycle of measuring current policies that began at the policy meeting in August 2024.
- The UK (UK) employer has eased the pace of employment after Prime Minister Rachel Reeves announced an increase in his employer's contribution to national insurance (NI). The final three employment measures suggest that the workforce has risen with a slower pace.
- UK Gross domestic product (GDP) growth remained flat in the third quarter and in October and November.
- Investors will pay close attention to BOE Governor Andrew Bailey's press conference after a policy decision to get clues on inflation outlook and financial policy guidance.
- UK inflationary pressure slowed at a faster pace than expected in December. Still, Citi analysts hope that inflation will increase first as wage growth increases sharply and energy prices reverse.
- Meanwhile, traders are priced an annual interest rate cut of 56 bps after a quarter-1% reduction on Thursday.
British pound prices today
The table below shows the rate of change in the British pound (GBP) against the major currencies listed today. The British pound was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | Chf | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.40% | 0.62% | -0.08% | 0.26% | 0.33% | 0.49% | 0.42% | |
| EUR | -0.40% | 0.21% | -0.49% | -0.14% | -0.08% | 0.09% | -0.01% | |
| GBP | -0.62% | -0.21% | -0.72% | -0.35% | -0.30% | -0.12% | -0.20% | |
| JPY | 0.08% | 0.49% | 0.72% | 0.35% | 0.41% | 0.54% | 0.50% | |
| CAD | -0.26% | 0.14% | 0.35% | -0.35% | 0.07% | 0.23 % | 0.16% | |
| AUD | -0.33% | 0.08% | 0.30% | -0.41% | -0.07% | 0.17% | 0.07% | |
| NZD | -0.49% | -0.09% | 0.12% | -0.54% | -0.23% | -0.17% | -0.07% | |
| Chf | -0.42% | 0.00 % | 0.20% | -0.50% | -0.16% | -0.07% | 0.07% |
The heatmap shows the rate of change of each other's major currencies. The base currency is selected from the left column, and the estimated currency is selected from the top row. For example, if you choose the British pound from the left column and move it along the horizon to US dollars, the rate of change shown in the box represents GBP (base)/USD (QUOTE).
Technical Analysis: Pound Sterling is below 1.2500
Sterling's pound's rise against the US dollar paused after rising above the psychological figure of 1.2500.
The 14-day relative strength index (RSI) oscillates within the range of 40.00-60.00, suggesting a lateral trend.
Looking down, the 1.2100 LOW on January 13th and the 1.2050 low for October 2023 serve as the pair's main support zone. As an advantage, the high of 1.2607 on December 30th serves as a critical resistance.
