Pound Sterling edges lower to 1.2450

GBP/USD remains capped below 1.2470, eyes on US data

The GBP/USD pair trades on a softer note around 1.2450 during the early Asian trading hours on Thursday. The softer UK inflation data prompted the expectation that the Bank of England (BoE) will start lowering interest rates in the coming months, which weighs on the Pound Sterling (GBP) against the Greenback. Investors will take more cues from the US weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, the CB Leading Index, and Existing Home Sales, due on Thursday. 

The BoE hinted that the UK is still on course for an interest rate cut, as recent data showed a further easing in the pace of price growth in the economy. On Wednesday, the Office for National Statistics (ONS) showed that the UK Consumer Price Index (CPI) inflation dropped to 3.2% in the 12 months to March, the softest level for two-and-a-half years. The figure was down from the previous reading of 3.4%. However, investors expect the first rate cut in August or September, according to the LSEG data. Read more...

GBP/USD gains some ground after British inflation data

The GBP/USD pair is currently trading slightly higher at 1.2448, tallying daily gains. Meanwhile, the USD’s rally was halted due to US Treasury yields declining, but the Greenback’s outlook is bright as the US economy remains strong and markets bet on a more aggressive Federal Reserve (Fed).

Earlier in the session, the UK's Consumer Price Index (CPI) for March reported a slight increase, indicating ongoing inflationary pressures. As a reaction, markets readjusted their expectations on the next decisions from the British bank, and the initial cut is now anticipated for September, a delay from previously expected August. Furthermore, the likelihood of a second reduction in December has decreased to 60% from being fully anticipated earlier in the week. This recalibration of expectations has benefited the Pound on Wednesday. Read more...