Pound Sterling tumbles as BoE cuts interest rates by 25 bps to 5%
The Pound Sterling (GBP) faces a sharp selling pressure against its major peers in Thursday’s London session. The British currency weakens as the Bank of England (BoE) has cut its key borrowing rates by 25 basis points (bps) to 5%, as expected. The rate-cut move came 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 BoE Governor 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. Read more...
GBP/USD under pressure as market anticipates Bank of England rate decision
The British Pound Sterling continues to decline steadily against the US dollar. The GBP/USD pair is trending towards 1.2848. On the one hand, the pressure from the USD rate is evident. On the other hand, investors are awaiting the outcome of today's Bank of England meeting and its decision on interest rates.
There is speculation that the BoE will lower the interest rate from 5.25% to 5.00% today. The inflationary environment, coupled with the state of the employment market in the UK, supports this adjustment. The probability of a rate cut is currently estimated at 65%. Read more...
GBP/USD Forecast: Pound Sterling could rally with a BoE hold
After posting small gains on Wednesday, GBP/USD came under renewed bearish pressure and fell to its weakest level in three weeks below 1.2800 in the European morning on Thursday.
The US Dollar (USD) struggled to find demand in the American session on Wednesday and helped GBP/USD edge higher. The Federal Reserve (Fed) left its monetary policy settings unchanged as expected after the July meeting. In the post-meeting press conference, Fed Chairman Jerome Powell noted that there was a "real discussion" about the case for reducing rates at the meeting, adding that a rate cut could be on the table in September. Read more...
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