Anna 
The Pound Sterling (GBP) experienced heightened volatility during Wednesday’s London session following the release of softer-than-expected Consumer Price Index (CPI) data for February by the United Kingdom Office for National Statistics (ONS). Annual headline and core inflation decelerated to 3.4% and 4.5%, respectively. This lower inflation trajectory is anticipated to prompt Bank of England (BoE) policymakers to contemplate early interest rate cuts, diverging from previous market expectations.
Investors should prepare for continued turbulence in the Pound Sterling as the BoE gears up to unveil its second monetary policy decision of 2024 on Thursday. Although the market anticipates the BoE to maintain interest rates at 5.25%, the subdued inflation figures may nudge policymakers towards a slightly dovish stance on interest rates.
Simultaneously, investor sentiment remains cautious ahead of the Federal Reserve’s (Fed) policy meeting, scheduled for announcement at 18:00 GMT. Market participants will closely monitor the quarterly updated dot plot and economic projections, as the Fed is expected to uphold interest rates within the range of 5.25%-5.50%. The dot plot provides insights into interest rate projections from Fed officials across various time frames.
