GBP/USD has increased by 0.31%, approaching last week’s peak of 1.2987 due to a decline in the US Dollar. Recent US Retail Sales data missed expectations, rising only 0.2% in February compared to forecasts of 0.6%, exacerbating recession concerns.
Manufacturing activity in New York fell sharply from 5.7 to -20, leading traders to price in 64 basis points of easing from the Federal Reserve. The US 10-year Treasury yield decreased to 4.277%, with the US Dollar Index dropping 0.34% to 103.38.
Bank Of England Policy Outlook
The Bank of England is expected to maintain current rates during its meeting, with futures indicating possible cuts in 2025. Should GBP/USD surpass 1.3000, it may challenge the November 6 high of 1.3047 or reach 1.3100; if it encounters resistance, it might fall to 1.2911 and then 1.2861.
The British Pound is currently performing strongly against other major currencies, leading in gains against the US Dollar.
The pound has edged up, nearing last week’s peak, as the dollar continues to lose strength. The weaker-than-expected retail sales figures from the US, showing only a modest rise instead of the anticipated 0.6%, have contributed to mounting worries about an economic slowdown. A weaker American economy often fuels expectations that the central bank will step in with rate cuts, pushing down the dollar’s value in the process.
Manufacturing data has added to this sentiment. The Empire State index took a steep dive from 5.7 to negative 20, a drop that traders have taken as another sign that the Federal Reserve may have little choice but to ease policy. Current interest rate futures suggest markets are now expecting a total of 64 basis points in reductions from the Fed later this year. Yields on US government bonds have declined, with the 10-year Treasury dropping to 4.277%. Meanwhile, the dollar index, which measures the currency’s performance against a basket of others, has slipped by 0.34% to 103.38.
British Pound Performance
At home, policymakers at Britain’s central bank are widely expected to hold interest rates steady at their next meeting. However, futures markets imply that any cuts are unlikely until next year. For traders watching sterling against the dollar, the 1.3000 level is now the key focus. If prices push past this point, the highs from early November come into play, with 1.3047 standing as the next test before a possible move towards 1.3100. Alternatively, if buyers fail to sustain momentum, a retreat to 1.2911 and, if downward pressure persists, 1.2861 could be on the horizon.
Against other major currencies, sterling has continued to perform well, registering the strongest gains versus the dollar.
