GBP Is Correcting Up
The British pound (GBPUSD) is currently just above 1.235, hovering near its lowest level since November 2023. Investors are carefully evaluating how strong recent UK PMI data might influence future monetary policy decisions. The latest PMI figures indicated that business activity in the UK surged to its highest point since May 2023, primarily due to significant growth in the services sector.
Initially, this encouraging PMI data lent some support to the pound. However, the mood in the markets shifted following ambiguous remarks from Dave Ramsden, the Deputy Governor of the Bank of England, regarding the outlook for interest rates.
Ramsden noted a reduced likelihood that UK inflation would persist at high levels and even suggested it could dip below the Bank of England's recent predictions. This prompted market participants to adjust their expectations, with some now forecasting a potential rate cut as soon as the Bank's August meeting, rather than the previously anticipated September. A few investors are even speculating about a rate cut as early as June.
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