UK Economic Concerns Weigh on Sterling
Sterling slipped slightly on Friday as fresh economic data underscored the UK’s economic challenges, leading to speculation about possible interest rate cuts by the Bank of England in its upcoming meeting.
The pound fell 0.1% against the dollar, settling at $1.3049. This drop came after the announcement that UK GDP increased by just 0.2% in August.
Despite being the strongest-performing major currency in 2024, thanks to the Bank of England’s careful stance on interest rates — with only one cut so far this year — traders remain cautious.
GBP/USD Pair Faces Pressure
The GBP/USD pair is hovering just above its monthly low of 1.3010. The outlook for the pound remains uncertain as the US dollar continues to show resilience. The US Dollar Index, which tracks the dollar against six major currencies, is holding steady near 103.00.
US Dollar Strengthens Amid CPI Data
The dollar’s firm position is being supported by unexpectedly strong US Consumer Price Index (CPI) data for September. This robust performance has reduced the likelihood of a 50 basis point rate cut by the Federal Reserve at its November meeting.
Pound Gains Against Euro
On a brighter note, sterling managed to edge up 0.1% against the euro, trading at €1.1936 in early Friday trading.
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