Pound Sterling trades subdued as BoE dovish bets mount
The Pound Sterling (GBP) registers minor losses against its major peers on Friday, with investors looking for fresh cues about how the Bank of England (BoE) will follow the interest rate cut path in 2025. The latest BoE policy announcement in mid-December indicated a dovish buildup as the nine Monetary Policy Committee (MPC) voted 6-3 to keep interest rates on hold, a bigger split than the 8-1 economists had predicted.
A higher number of BoE officials voting for an interest rate cut has led traders to gradually raise dovish bets for 2025. Markets currently see a 53-basis points (bps) reduction in interest rates in 2025, up from 46 bps after the BoE policy announcement on December 19, suggesting that there will be at least two meetings in which officials will reduce key borrowing rates by 25 bps. Read more…
British Pound stabilizes as Retail Sales edge up
The British pound has steadied on Friday, after sliding 1.6% in the past two days. In the European session, GBP/USD is trading at 1.2510, down 0.10% on the day at the time of writing.
UK retail sales posted a small gain of 0.2% m/m in November. This was a rebound from the 0.7% decline in October but missed the market estimate of 0.5%. Retail sales growth was hampered by weak clothing sales, which fell to their lowest volume since January 2022, as well as the wet weather. Annually, retail sales rose 0.5%, following a downwardly revised 2% gain in October and below the market estimate of 0.8%. Read more…
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