Ella 
GBP/USD gained momentum in early trading in Asia on Thursday. The pair’s rebound was supported by a weaker dollar following dovish comments from Federal Reserve Chairman Jerome Powell at a press conference. Investors will pay close attention to the Bank of England’s interest rate decision on Thursday, as well as the preliminary reading of the US S&P Global Purchasing Managers Index (PMI) for March. As of press time, GBP/USD was trading at 1.2797, up 0.09% on the day.
The Federal Reserve decided on Wednesday to keep its benchmark overnight lending rate at a range of 5.25% to 5.5%. Federal Reserve Chairman Jerome Powell has not indicated a timing for a rate cut, but is expected to do so before the end of the year. Futures market prices are pointing to a 75% chance the Fed will begin cutting interest rates at its June meeting, according to the CME FedWatch tool.
Fed Powell pointed out that recent high-inflation reports have not changed the basic situation that price pressures in the United States are slowly easing. Fed officials expect to cut interest rates by 75 basis points by the end of 2024 because solid economic growth will continue. Separately, the latest economic forecasts show that the personal consumption expenditures price index excluding food and energy (core PCE) will rise 2.6% by the end of the year, compared with the 2.4% forecast in December.
In the UK, the Bank of England is expected to keep interest rates unchanged at 5.25% on Thursday. February inflation data may lead the Bank of England (BOE) to continue cutting interest rates in the coming months. Data released on Wednesday showed that the consumer price index rose at an annual rate of 3.4% in February, compared with an increase of 4.0% in January, which was lower than market expectations of 3.6%. The figure marked the weakest growth rate since September 2021. Meanwhile, core consumer price index fell to 4.5% in February from 5.1% in January, missing expectations of 4.6%.
