Pound Sterling trades with caution as traders price in BoE interest rate cut next month
The Pound Sterling (GBP) trades cautiously against its major peers on Thursday as the higher-than-expected United Kingdom (UK) Public Sector Net Borrowing in December has weighed on the economic outlook. The Office for National Statistics (ONS) reported on Wednesday that higher borrowing costs and a one-off payment for the repurchase of military accommodation swelled the budget deficit. This scenario could force Chancellor of the Exchequer Rachel Reeves to raise the tax burden on individuals or trim public spending, which could slow down the already moderate growth rate in the UK.
UK government’s borrowing costs have accelerated lately amid concerns that higher tariffs by United States (US) President Donald Trump would dampen growth prospects. This led to a sharp increase in 30-year gilt yields to 5.47% on January 14, the highest level seen in over 26 years. Read more…
GBP/USD Forecast: Pound Sterling loses strength after failing to clear technical hurdle
GBP/USD climbed to a two-week-high near 1.2380 in the European session on Wednesday but lost its traction to close the day marginally lower. The pair edges lower toward 1.2300 in the European morning on Thursday and the technical outlook highlights a loss of bullish momentum in the near term.
The US Dollar (USD) came under bearish pressure in the first half of the day on Wednesday as risk flows dominated the action in financial markets. Although Wall Street’s main indexes opened higher, rising US Treasury bond yields helped the USD hold its ground in the American session. Read more…
