The post Pound Sterling posts fresh two-week low with US core PCE inflation in focus appeared on BitcoinEthereumNews.com.

The Pound Sterling prints a fresh two-week low at 1.2845 against the US Dollar on Friday as investors turn cautious ahead of the US core PCE Price index. The BoE is expected to cut interest rates next week. Robust US Q2 GDP growth has improved the economic outlook. The Pound Sterling (GBP) exhibits a steady performance against its major peers on Friday. The British currency is expected to remain on the sidelines as investors shift focus to the Bank of England’s (BoE) monetary policy meeting, which is scheduled for Thursday. A Reuters poll on July 18-24 showed that more than 80% of economists said the BoE would announce a rate-cut decision in its August meeting for the first time in more than four years. The BoE will ditch its restrictive monetary policy framework, which it has been maintaining since the pandemic hit global markets. The BoE is expected to reduce its key borrowing rates by 25 basis points (bps) to 5% in the August meeting. However, traders see a 46% chance of the BoE pivoting to policy-normalization. It appears that the absence of BoE officials’ endorsement for rate cuts has limited BoE rate-cut expectations. Despite the return of the annual headline Consumer Price Index (CPI) in the United Kingdom (UK) to the central bank’s target of 2%, BoE policymakers hesitate to support interest rate cuts amid worries about strong wage growth momentum that has been resulting in sticky price pressures in the service sector. Also, signs of wage growth easing ahead remain absent due to the shortage of labor in the United Kingdom. The UK labor market has faced a shortage of workers for a long period due to voluntary retirements by individuals and the Brexit event. Meanwhile, the UK’s economic prospects remain firm due to expanding activities in manufacturing as well as…

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Filed under: News - @ July 26, 2024 9:18 am