The British pound hovered around $1.276, nearing a one-month high, buoyed by expectations of a cautious stance from the Bank of England (BoE).
Sterling hovers near one-month high
Investors are closely watching UK economic data due Friday, anticipated to reveal economic growth and a rebound in October's manufacturing sector. The BoE is expected to keep interest rates unchanged next week and adopt a measured approach in the coming year, with markets predicting just three modest rate cuts by the end of 2025. In contrast, the European Central Bank (ECB) is set to reduce rates by 25 basis points later today and may continue cutting rates into at least the first half of 2025, reflecting Germany’s economic challenges.
Eyes on central banks
The ECB’s more aggressive rate-cutting approach highlights the Eurozone's deeper difficulties compared to the UK, where inflation remains relatively elevated. Meanwhile, in the US, inflation data met expectations, strengthening the outlook for a slowdown in the Federal Reserve's policy tightening.
