Band of England comments weaken the Pound

Daily Currency Update

On Friday morning, the UK retail sales figures were released, and they did not meet the forecasted expectations. Although February's figure was revised up from 0.0% to 0.1%, the March figure was flat, which is lower than the expected 0.3%. The rise in automotive fuel and non-food store sales was offset by the fall in food stores and non-store retailers. Despite this news, the Pound did not fluctuate much and continued to rise from its previous fall below 1.2400 against the USD pre-release, reaching up to 1.2450 over the morning. On the other hand, GBP/EUR continued to trade just below 1.1700 with less volatility.

Later in Friday's session, the Bank of England Deputy Governor Dave Ramsden's comments saw Sterling drop against the USD and EUR. He stated that domestic inflation pressures were receding and the price growth could fall short of the central bank’s recent projections. These comments have now increased the possibility of the Bank of England cutting interest rates sooner than expected. Also, it is now predicted that there could be more interest rate cuts than expected for 2024. Previously, two interest rate cuts were expected, whereas now three to four are being factored. As a result, the GBP/USD has seen fresh lows testing 1.2350, and GBP/EUR has dipped below 1.1600.