The pound sterling fell in the European market on Wednesday against a basket of global currencies, continuing its losses for the second day in a row against the US dollar, moving away from the highest level in a week, due to the decline in the possibility of a cut in US interest rates next March.
The pound sterling is currently under pressure ahead of the launch of the Bank of England Governor’s testimony before the British Parliament regarding the country’s financial stability report, and he may receive questions regarding the future of interest rates in the United Kingdom.
Price view
British pound exchange rate today
The pound fell against the dollar by 0.2% to ($1.2686), from the opening trading price of ($1.2710), and recorded the highest level today at ($1.2718).
The pound ended Tuesday's trading down 0.3% against the dollar, its first loss in the last five days, as part of corrections from the highest level in a week at $1.2771.
The British pound competed with the US dollar for the accolade of being the best-performing major currency in the first week of 2024, thanks to lower market bets on the scope of the Bank of England's interest rate cuts scheduled in the coming months.
Last week's strong upgrade to December PMI data reinforced signs of the economy returning to growth territory at the turn of the year, reducing the need for immediate interest rate cuts from the Bank of England.
Andrew Bailey
At 14:15 GMT, the testimony of the Governor of the Bank of England, Andrew Bailey, will begin before the Treasury Committee of the British Parliament, regarding the financial stability report in the United Kingdom, and Bailey is likely to address the recent economic developments, the bank’s battle with inflation, and the future course of monetary policy and British interest rates.
Andrew Bailey recently said: There is still a long way to go in the battle to control inflation. Andrew Bailey added: We cannot say that interest rates in England have reached their peak, and it is too early to start speculating about a cut in interest rates by the Bank of England.
U.S. dollar
The dollar index rose on Wednesday by 0.1%, maintaining its gains for the second session in a row, reflecting the continued rise in the levels of the US currency against a basket of major and minor currencies.
This rise comes as there is noticeable activity in currency purchases as the best available investment, especially in light of the successive economic data and Federal Reserve comments that reduce the chances of the Federal Reserve cutting interest rates next March.
