The Pound Sterling (GBP) has weakened to around 1.2920 against the US Dollar (USD) during North American trading hours on Friday. This decline follows the US Dollar’s recovery, spurred by expectations of stable interest rates from the Federal Reserve.
The Fed maintained interest rates in the range of 4.25%-4.50% and expressed no urgency to change this. Statements from Fed officials emphasize caution amid uncertainties related to the economic outlook, particularly concerning potential inflation from tariff policies.
Bank Of England’s Interest Rate Decision
In the UK, the Bank of England (BoE) left interest rates unchanged at 4.5%. The decision reflected a consensus among the Monetary Policy Committee, although one member sought a rate reduction.
Recent wage growth reported by the Office for National Statistics showed a rise of 5.9% in January, contributing to persistent inflation concerns. Investors will watch for upcoming Consumer Price Index data for further insights into UK inflation trends.
The GBP has experienced a decline against various currencies, with its strongest performance noted against the Australian Dollar. Technical analysis suggests bullish trends may resume if corrective levels stabilise. Key support zones are identified at 1.2770 and 1.2615, while resistance lies at 1.3100.
We have seen the Pound Sterling ease down to roughly 1.2920 against the US Dollar as trading progressed in North America on Friday. This came as the US Dollar picked up support, largely due to a growing expectation that the Federal Reserve will keep rates steady for longer.
The Fed, as expected, left interest rates untouched in the 4.25%-4.50% bracket. There was no indication of imminent changes. Policymakers remain cautious, keeping an eye on inflation risks. Concerns over price increases stemming from trade policies have been mentioned, though officials have stopped short of making strong claims about their effects.
Back in the UK, the Bank of England opted to hold interest rates at 4.5%, with most members of the Monetary Policy Committee favouring the decision. One vote came in favour of a reduction, but the broader stance remains steady.
January’s wage growth figures, released by the Office for National Statistics, showed earnings rising 5.9% from the previous year. That number will have caught attention. It reinforces concerns about inflation sticking around for longer. The upcoming Consumer Price Index data will be closely followed, given its ability to steer future policy decisions.
The Pound has slid against several currencies, though it has fared relatively well against the Australian Dollar. Looking at the technical charts, the larger trend may stay positive if current corrective levels hold firm. Support is observed around 1.2770 and further down at 1.2615. Resistance is outlined at 1.3100, a level that would need to be surpassed before momentum turns in favour of further advances.
Market Outlook And Future Expectations
From a trading perspective, these developments require a careful approach. The Fed’s cautious tone suggests stability may persist in US monetary policy, which could keep the Dollar supported. Meanwhile, the BoE’s stance indicates it is not in a rush to cut rates, though ongoing inflation worries make matters less predictable. We’ll be watching next week’s UK inflation figures closely, as they could set the tone for rate expectations and influence Sterling’s movement in the coming sessions.
