Anna 
The Pound Sterling (GBP) faces challenges in retaining gains during Wednesday’s European session, slipping from a fresh weekly high near 1.2670. Tuesday’s upward movement in the GBP/USD pair appeared inconsistent with the US Dollar’s decline, driven by somewhat dovish remarks from Bank of England (BoE) Governor Andrew Bailey and other policymakers.
Governor Bailey acknowledged that market expectations for rate cuts are not “unreasonable” and noted “encouraging signs” of easing price pressures. However, he refrained from commenting on the timing and extent of any tightening policy. Deputy Governor Ben Broadbent indicated a shift in the BoE’s focus from the intensity of restrictive monetary policy to its duration. Additionally, BoE policymaker Swati Dhingra expressed concerns about the potential downside risks of maintaining restrictive interest rates for the UK economy.
The Pound’s performance is expected to be influenced by the upcoming release of the Federal Open Market Committee (FOMC) minutes scheduled for 19:00 GMT. The minutes will likely shape the next moves in the GBP/USD pair as traders seek insights into the Federal Reserve’s rate-cut path and assess the impact on the US Dollar dynamics.
