GBP/USD depreciates on expected BoE rate cut

GBP/USD drops below 1.2500 due to dovish BoE, Trump tariff plans

The GBP/USD pair halts its three-day winning streak as the British Pound (GBP) faces headwinds due to growing market expectations of a near-certain rate cut by the Bank of England (BoE) to 4.5% at its upcoming meeting. During Tuesday’s Asian session, the pair trades around 1.2440.

Soft economic data from the United Kingdom (UK)—including weaker inflation, retail sales, labor market figures, and sluggish GDP growth in December—has strengthened the case for a 25 basis point rate cut by the BoE in February. Read more…

GBP/USD continues to struggle near key levels

GBP/USD got hung up on key technical levels for the second trading day in a row, dropping a spinning top candle near the 1.2500 handle and leaving Cable traders facing a bearish downturn depending on how the Federal Reserve’s (Fed) rate call goes later this week.

UK data is extremely limited this week, leaving Cable bidders to face Wednesday’s upcoming Fed rate call entirely alone. The Fed is broadly expected to stand pat on interest rates for January, and depending on how confident the Fed’s Chair Jerome Powell sounds during his mid-week press conference, market hopes of an uptick in the pace of Fed rate cuts in 2025 could get thrown in jeopardy. Markets have stepped up their expectations of Fed rate cuts through the year, doubling the pace of rate cuts through the calendar year to 50 bps in total. Read more…