Pound Sterling recovers some losses as BoE refrains from aggressive easing cycle
The post Pound Sterling recovers some losses as BoE refrains from aggressive easing cycle appeared on BitcoinEthereumNews.com.
The Pound Sterling falls to near 1.2770 against the US Dollar after BoE’s dovish policy decision. The BoE cut interest rates by 25 bps to 5%, with a 5-4 vote split, as expected. The US Dollar struggles to hold recovery due to weak US ISM Manufacturing PMI in July. The Pound Sterling (GBP) recovers some of its losses but still remains negative against its major peers in Thursday’s New York session. The British currency bounces gradually as the Bank of England (BoE) avoids endorsing an aggressive policy-easing stance on interest rates ahead. BoE Governor Andrew Bailey said in the press conference, “We need to make sure inflation stays low, and be careful not to cut interest rates too quickly or by too much.” On the United Kingdom’s (UK) service inflation outlook, Bailey commented, “Services price inflation may rise slightly in August before easing in the rest of the year.” Earlier, the BoE has cut its key borrowing rates by 25 basis points (bps) to 5%, with a 5-4 majority in the Monetary Policy Committee (MPC) vote, which was also in line with market expectations. Policymakers who voted for a rate cut were Andrew Bailey, Sarah Breeden, Swati Dhingra, Dave Ramsden, and Clare Lombardelli. BoE’s latest forecast report for the year-end shows that the bank rate will be at 4.9%, higher from May’s forecast of 4.8%. This suggests that there will be no more rate cuts this year. The bank sees wage growth momentum at 5%, which is similar to prior projections. Meanwhile, investors await Andrew Bailey’s speech to get more cues about the interest rate guidance and the impact of Labor’s fiscal policies on inflation and the economy. Daily digest market movers: Pound Sterling weakens while US Dollar struggles to hold gains The Pound Sterling slides further and posts a fresh three-week low to near 1.2770 against the US Dollar (USD) in Thursday’s American session. The GBP/USD pair weakened…
Filed under: News - @ August 1, 2024 9:20 pm