UK Sterling Gains as Traders Await Data
Currency traders are closely monitoring sterling's performance this week as it edges towards a weekly gain against the dollar The pound, currently at $1.2656, has shown resilience despite a slight 0.1% dip today, positioning itself for a 1% weekly increase. Against the euro, it also made modest gains, up 0.1% to 85.70 pence.
Data Releases Awaited Next Week
Traders are eagerly awaiting key data releases next week that could provide insights into the Bank of England's potential interest rate decisions. Recent reports indicating higher-than-expected wage growth in the UK's first quarter have sparked speculation, while other figures hint at a cooling labor market. With consumer price inflation data scheduled for Wednesday and 'flash' PMI data on British business activity following on Thursday, the market anticipates crucial signals for future monetary policy.
Rate Cut Expectations and Market Sentiment
Market sentiment reveals a 55% likelihood of a rate cut by the Bank of England in June, according to LSEG data. Economists at Investec maintain their baseline prediction of a June rate cut but also acknowledge the possibility of a delay until August. They suggest that significant reductions in private pay rates and service inflation could influence the Monetary Policy Committee's decision-making process.
The upcoming data releases and ongoing speculation regarding interest rate adjustments are likely to keep currency markets on edge as traders assess the economic landscape and its potential impact on the pound's trajectory.
