Pound Sterling outperforms as investors digest Reeves' welfare cuts, Trump's auto tariffs
The Pound Sterling (GBP) trades higher against its major peers on Thursday. The British currency recovers most of Wednesday’s losses driven by a softer-than-expected United Kingdom (UK) Consumer Price Index (CPI) data for February and a reduction in welfare benefits announced by Chancellor Reeves in the Spring Statement.
The UK CPI report showed that inflationary pressures rose at a slower-than-expected pace due to moderate growth in clothing and footwear prices. The headline and the core CPI grew by 2.8% and 3.5% year-over-year, respectively. The Service inflation, which is closely tracked by Bank of England (BoE) officials, rose steadily by 5%. Cooling inflation bodes poorly for the Pound Sterling as it can drive BoE dovish bets. Read more...
GBP/USD Forecast: Pound Sterling remains fragile despite recent rebound
Following a two-day recovery, GBP/USD turned south and lost about 0.5% on Wednesday. After dipping below 1.2900, the pair managed to correct higher early Thursday.
Softer-than-expected inflation data weighed on Pound Sterling in the early European session on Wednesday. Later in the day, the UK's Office for Budget Responsibility announced that they revised down the Gross Domestic Product (GDP) growth forecast for 2025 to 1%, causing GBP/USD to stretch lower. Read more...
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