Anna 
During Wednesday’s European session, the Pound Sterling (GBP) declined to 1.2600 against the US Dollar (USD) as investors anticipate that the Bank of England (BoE) may initiate interest rate cuts sooner than previously forecasted. This shift in sentiment comes as the BoE adopts a more dovish stance on the interest rate trajectory, driven by softening inflation in the United Kingdom.
BoE Governor Andrew Bailey recently conveyed in an interview with the Financial Times that market expectations for rate cuts in the current year are not unwarranted. Speaking on the inflation outlook, Bailey noted, “We are not seeing a lot of sticky persistence.”
The GBP/USD is experiencing downward pressure amid subdued market sentiment. Investors are exercising caution ahead of the release of the United States core Personal Consumption Expenditure price index (PCE) data for February, scheduled to be published on Good Friday. Concurrently, the US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, has climbed to 104.40, further contributing to the GBP’s decline.
