DailyBubble News
DailyBubble News

GBP/USD hovers around 1.2500 on the stronger US Dollar, focus on BoE rate decision

The GBP/USD pair weakened to 1.2500 on Wednesday as the USD strengthened. The Fed’s Neel Kashkari mentioned that it’s too early to say inflation has stopped, and they may cut rates if needed. The Bank of England is expected to keep interest rates at 5.25% in their upcoming meeting on Thursday.

The USD Index rose slightly to 105.40, causing the major pair to decline. Fed officials are set to speak later on Wednesday. Kashkari stated that if inflation eases, rate cuts could be considered. Meanwhile, Richmond Fed President Thomas Barkin believes current rates will help bring inflation down.

Fed easing expectations have decreased, boosting the Greenback against other currencies. The chance of a June rate cut remains at around 10%, with September odds at 85%. On Friday, the University of Michigan Consumer Sentiment Index is expected to drop from 77.2 to 76.0 in May.

The Pound Sterling also faced pressure as investors awaited the BoE’s monetary policy meeting. It is anticipated that interest rates will remain unchanged at 5.25%. Speculation suggests that the BoE may cut rates sooner than the Fed, impacting the Cable. BoE Governor Andrew Bailey previously indicated comfort with the market’s expectation of two or three rate cuts this year.

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