On Friday, the UK currency (GBP) experienced uncertainty as investors awaited new guidance regarding interest rates from the Bank of England (BoE). The GBP/USD pair moved sideways due to calm market sentiment influenced by expectations of a BoE rate cut, which could affect the Pound Sterling.
 
While the timing remains uncertain, investors hope for a rate cut in the second half of the year, with a less than 50% chance of a rate cut in June, while a dovish policy in August seems inevitable.
 
BoE Governor Andrew Bailey stated that price pressures are expected to drop to the 2% target in spring, allowing the BoE to consider looser monetary policy.
 
Meanwhile, the US dollar moved sideways after a V-shaped recovery, despite improving labor market conditions. New unemployment claims decreased to 201,000 for the week ending February 16, lower than the expected 218,000 and previous data of 213,000. Fed policymakers still need more evidence to confirm a reduction in inflation to the 2% target.
 
The Pound Sterling is in a consolidation phase around 1.2650, reflecting a calm market atmosphere.
 
BoE policymakers have become more dovish regarding interest rates due to the worsening cost-of-living crisis, focusing on the duration of current interest rates. Governor Bailey, in his testimony before the UK Parliament's Treasury Select Committee, stated that the BoE does not need to reach the 2% inflation target to lower interest rates. He also considered market expectations for a rate cut to be reasonable.
BoE policymaker Swati Dhingra warned of the hard landing impact if the rate cut decision is delayed.
 
Preliminary data from S&P Global/CIPS for February shows the Manufacturing PMI at 47.1 (below expectations) and Services PMI at 54.3 (exceeding expectations). Overall market sentiment is quiet without potential indicators.
 
In a global context, demand for safe-haven assets has increased due to the crisis in the Middle East and hawkish statements from the FOMC in January. The US Dollar Index is near 104.00.
 
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This is forex news regarding "UK Currency (GBP) On Fire! Investors Hunt for Interest Rate Clues from the BoE." This analysis is based on fundamental and technical views from trusted sources and is not a recommendation or solicitation. Always remember that this content aims to enrich readers' information. Conduct independent research on other forex information to use as a reference in your trading.
 
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