The British Pound Hits a Pause After a Rough Week
On Friday, the pound steadied after bouncing back on Thursday, but it’s still hovering near the one‑month low against the dollar.
What’s Happening in the Market?
After a jumpy start to the week, the markets finally took a breather. The pound’s little lift comes amidst a broader trend of steadiness, though it could still be on track for a fourth straight weekly decline.
Bank of England Actions at Play
- Interest rate cuts: The recent BoE reduction has put the pound under pressure, and more cuts could keep it feeling weak.
- US policy expectations: If traders think the Fed might trim rates a full percentage point this year—despite tighter cuts expected in the UK—the pound could ease its slide against the dollar.
- Yields drifting down: Even after a brief rebound, UK yields remain on a downward trend. A softer monetary stance could keep them dragged down.
Looking Ahead
Traders will be watching the June unemployment figure (June 2025) on Tuesday. A reading below 4.4% could give the pound a boost. But the real twist will come with Wednesday’s inflation data—if it falls short of expectations, we might see further falls in both the pound and yields.
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