Pound Sterling Price News and Forecast: GBP Trades Cautiously

Sterling trades cautiously as investors price in BoE rate cut next month

The British Pound (GBP) Trades Cautiously Against Major Peers on Thursday as the United Kingdom’s (UK) public sector’s higher-than-expected net borrowing in December has hit the economic outlook. The Office for National Statistics (ONS) reported on Wednesday that higher borrowing costs and a one-off payment for the buyback of military accommodation increased the budget deficit. This scenario could force Chancellor of the Exchequer Rachel Reeves to increase the tax burden on individuals or cut public spending, which could slow the already moderate growth rate in the UK.

The UK government’s borrowing costs have accelerated lately amid concerns that United States (US) President Donald Trump’s higher tariffs would dampen growth prospects. This led to a sharp rise in UK 30-year bond yields to 5.47% on January 14, the highest level seen in over 26 years. Read more…

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GBP/USD Forecast: Sterling loses strength after failing to clear technical hurdle

GBP/USD rose to a two-week high near 1.2380 in the European session on Wednesday, but lost traction to close the day marginally lower. The pair declines towards 1.2300 in the European morning on Thursday and the technical outlook highlights a loss of short-term bullish momentum.

The US Dollar (USD) came under bearish pressure in the first half of the day on Wednesday as risk flows dominated the action in financial markets. Although Wall Street’s main indices opened higher, rising US Treasury yields helped the USD maintain its position in the American session. Read more…

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Source: Fx Street

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